Susan Tompor Detroit Free Press Published 7:00 AM EST Dec 1, 2018 The last place many parents would look for ideas on how to save money for college is their workplace. After all, connecting with a 529 college savings plan is not exactly your typical job perk. Many young families don't even use 529 plans for college savings. About 45 percent of parents use an old-fashioned savings account to put aside money for college – making the low-risk, low-return accounts the most commonly used strategy, according to the 2018 "How America Saves for College" report by Sallie Mae, a provider and servicer of private student loans. Only 29 percent use the next most popular investment vehicle, tax-advantaged college 529 plans that offer a mix of stocks and bonds. Many times, families don't even know how to open a 529 plan, according to Mark Kantrowitz, publisher and vice president of research for Savingforcollege.com. But more … [Read more...] about Saving for college: More employers promote 529 plans.
How america saves for college
Sunday May 27, 2018 12:01 AM It should only be a strategy of last resort. Written by Steve Rosen It's one of the cardinal rules of savings for parents, yet many pay it little heed: Don't raid your retirement accounts to cover your child's college tab.With college costs skyrocketing, it is understandable that many parents would pull money from their 401(k) and other retirement plans to cover the here and now of tuition, room and board.But no matter how tempting and well-intended, that should only be a strategy of last resort, family financial experts say. Not only are there potential minefields involving taxes and early withdrawal penalties, but your time frame for replenishing those funds may be shorter.Why sacrifice your retirement strategy when your college student has more options for funding college and a longer time frame for repaying any loans?TODAY'S SPONSOR:More parents seem to be getting that message, according to the 2018 "How America Saves for College" survey … [Read more...] about Kids and Money: Fewer parents raiding retirement funds to pay for college
(StatePoint) Parents are socking away more money for their children’s higher education, and they are doing so in smarter ways, suggests a new report from Sallie Mae.One-third of parents saved more for college this year than last, and the average amount saved -- $18,135 -- is the highest amount reported in the last five years of “How America Saves for College,” a national study by Sallie Mae and Ipsos.After saving for general needs and emergencies, parents earmark funds for college more than for any other specific purpose, alongside retirement. So, how are they doing it?To keep their college savings on track, 61 percent of parents contribute a set amount to their college fund on a regular basis. To find more money for college, 30 percent of parents have cut back on discretionary spending, and 27 percent have reduced their household expenses. This year marks the first time that tax-advantaged 529 college savings plans hold the largest share of college savings, at 30 … [Read more...] about Top Saving-for-College Trends
(MoneyWatch) It's no surprise that another consequence of the difficult economy is that parents continue to struggle to pay for their children's college costs. According to the most recent study by Sallie Mae, "How America Pays for College 2011," the amount parents paid towards college costs from savings and income has fallen from 36% to 30% over the past two years. So what can you do about this? For starters, financial planning studies estimate that parents saving for college should save about 6% of their income annually to have sufficient assets accumulated by the time their child goes to college. Folks who are saving for their child's future college costs say they feel more confident in the fact that they have a plan to save. Some also report using supplemental funding sources and rewards programs (such as UPromise) to increase college savings. Clearly saving for college is a more viable strategy for parents with younger children who are years away from college than for those whose … [Read more...] about 529 plans: One of the best ways to save for college
College savings are a high priority, with over 50 percent of families establishing accounts. That's according to the recently released report, "How America Saves for College 2014," an annual study by Sallie Mae, a leading student lender. Among families saving for college, the average savings across all college accounts is over $15,300, a 30 percent increase over last year. As you would expect, the average amount saved by families with teen students is higher than for families with children ages 7-12 ($21,400 versus $16,500). But looking deeper into the report, you'll find that where folks put their savings into action indicates a scattered approach to this important savings goal. While many families use special vehicles specifically designed for college savings, the largest percentage of use general bank savings accounts (45 percent) and checking accounts (24 percent.) The problem with them is that the interest rate on the money saved is nearly zero, while college costs continue to … [Read more...] about The smartest ways to save for college