After likely being bombarded with student loans themselves, many Millennial parents are hoping to prevent their children from going through the same experience. Though they are setting more money aside for future education of their children, it still may not be enough to cover the cost of exorbitant tuition costs.
Increased savings, increased tuition
According to a recent Fidelity report, approximately 50 percent of parents in their early thirties are planning to pay for their children’s entire college education. Back in 2007, the percentage for the same group was a mere 16. This assertion isn’t all talk, either. Parents in their early thirties have saved up an average of $1,500 per year for their children’s college tuition. This is approximately $500 more than the average amount their parents had saved for them.
Though this increase in savings is an improvement, Millennial parents will need to compile far more in order to pay for their children’s schooling. According to The College Board, students on average spent $12,833 per year on state school tuition, and $23,549 per year on that of a private one. Astoundingly, these numbers represent the cost after taking grants and scholarships into consideration.
How should parents save?
It is recommended that parents start saving early. Setting up automatic payments into a dedicated savings account is ideal for future large expenses. A 529 plan will allow any investment gains to remain untaxed. On the other hand, funds taken out of the 529 that are not used towards schooling will be subject to a 10 percent deduction.
If you want to learn more about how to best save for education, or are wondering about the proper steps to take in your individual situation, it is best to contact a reputable student loan attorney in West Palm Beach. Kelley & Fulton invites you to schedule an appointment with our team. Let us get further acquainted with your situation today.