In 6 years my son will attend college (or a post-secondary education). Six months ago my husband and I realized that we didn’t have one penny saved for his tuition costs. Because of this, I feel a sense of guilt knowing that we didn’t do our part as parents by providing a financial safety net.
According to Bloomberg Business Week:
“The average student borrower now takes out $7,874 in federal loans.”
I was floored, especially when I multiplied the sum by 4 years of college. My son could potentially end up leaving college with $31, 496.00 in student loan debt!
What does this mean for my son? Will he be able to attend college? What if he can’t get a scholarship? What if he wants to attend a private school? Have we messed up our son’s future?
As I sat there I thought about how I paid for college as a broke 18 year old student. I relied heavily on Pell Grants and student loans. While I am grateful for the financial support that I received, I don’t want my son to be hounded by debt. After the Bloomberg article, I decided that I needed to devise a savings plan so my son could get to college.
After scouring the Internet and speaking to Financial Advisers, we came up with three steps to secure my son’s future:
We signed up for a 529 B plan.
According to New York’s 529 Advisor Guide, 529 Advisor plans are: “state- sponsored plans that allow families to invest for college beneficiaries on a tax-advantaged basis.”
We decided to “set aside” monies every month in a Money Market account that earned interest strictly for college planning for ALL three of our children, but with more money going to our oldest child since he would attend college first.
We monitored college tuition hikes and researched various potential scholarships available. When he begins the college application process we don’t want to have “sticker shock,” so every year we check tuition hikes and support any legislation that plans to stabilize the costs to parents and students.
While we know college is 6 years away, we now understand that planning financially starts now. We’ve enrolled him in programs that prepare students academically for college.
Are you financially ready to send your child to college?
Words By: Franchesca Lane-Warren
Google Images: Fame Magazine/HBCU Graduation