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
Karen Herzog Milwaukee Journal Sentinel Published 6:00 AM EDT Oct 18, 2018 Families spent an average of $26,568 for a year of college in 2017-'18, and nearly half of that came from income and savings, according to the latest national "How America Pays for College" report from Sallie Mae. The annual report suggests parents are paying slightly more out of pocket for their kids' undergraduate education — including room, board and fees — and students are borrowing less. That's occurring amid continued concerns over how much student loan debt young people should carry out of college. Last year, 34 percent of costs were covered by parent income and savings — averaging $8,891 — while 13 percent of costs — an average $3,339 — was picked up by student income and savings. More than half of families borrowed for college, according to Sallie Mae, which originates, services and collects private education loans. The company also provides college savings and … [Read more...] about College savings: Students are borrowing less as parents pay more
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
Susan Tompor Detroit Free Press Personal Finance Columnist Published 12:04 p.m. UTC May 26, 2018 Jon and Sally Dean signed up for Michigan's prepaid college tuition plan when their daughter Alexandra was age 2. The couple spent around $6,500 for each year of prepaid tuition — around $26,000 total — and made sure they paid the bill off long before their daughter stepped foot into Grosse Pointe North High School. "It just became a bill we had every year for 10 years," said Dean, 45, who lives in Grosse Pointe Woods. "It's non-negotiable. We paid for it. We needed to do it." The Dean family treated the expense a lot like a mortgage — something that took priority before any talk about the prospect of big vacations or luxury cars. It's a commitment that paid off. Alexandra Dean graduates in June and heads to Michigan State University in the fall with four years of tuition already covered. The MET contract does not cover room and … [Read more...] about Here’s why you should give 529 college savings plans a second look
(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