August 24, 2018

Future Scholar Celebrates College Savings Month

Ah, September. Kids are getting settled into school and parents have started thinking about the future – maybe even college.  

That’s why September is widely recognized as College Savings Month, and why we decided to take a closer look at the importance of saving for college.

The Rising Cost of Higher Education

If you’re like us, you might have thought the skyrocketing cost of a college degree would have plateaued by now. Unfortunately, there doesn’t seem to be an end in sight as the cost of postsecondary education continues to rise faster than inflation.<

In fact, tuition and fees rose again at both public and private colleges in 2017 – between 2.9% and 3.6% – according to The College Board’s annual report. The average cost of a college degree for in-state students (tuition, room and board and fees) at a public four-year college is now $20,770.1

But before you start thinking, “Maybe my child can’t afford college,” think about the cost of not having a college degree.  

Just consider: college graduates earned on average, 56% more than high school graduates in 2015, according to data compiled by the Economic Policy Institute.2

Starting Early May Cost You Less

Saving for college as early as possible is such a powerful concept we can’t help but shout it from the rooftops.

Why? Because unlike other savings goals such as saving for retirement, saving for college comes with a much shorter window of time.

But if you start early, say when your children are very young or even first born, you may not have to save as much as those who wait until their children are older before starting to save.

In fact, to see how the “Magic of Compound Interest” works, see how one CPA breaks it down:

If you didn’t start saving the minute your child was born, don’t fret. No matter where you are in the pre-planning phase, it’s important to start saving and save however much you can, when you can.

Giving Your Child a Financially Strong Future

Why is saving for college in advance so important? Studies have shown that college graduates without debt have a much better start in life financially than those carrying large amounts of debt from student loans or credit card debt.

In fact, the long-term implications for those who graduate with large amounts of debt is startling.

Carrying crippling debt after graduating can impact a young adult’s credit score as well as his or her ability to begin saving for life goals such as starting a family, buying a home or affording retirement.

Here in the Palmetto State, S.C. college graduates carry more student loan debt, on average, than grads in nearly every other state in the Southeast, and the state is among the 10 states for highest student loan debt load, according to data from The Institute for College Access & Success.3

So the more you can save ahead of time and teach your children about financial literacy, the better off they will be in the future.

“This is why I continually sing the praises of opening a Future Scholar account and getting started as soon possible,” said South Carolina Treasurer Curtis Loftis. “It is still the smart, easy way to save for college.”

For More Information.

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“College tuition is still getting more expensive,” Web. 25 Oct., 2017.

2 “Pay gap between college grads and everyone else at a record,” Web. 12 Jan., 2017.

3 “Student Loan Debt Worse Than You Heard,” Aug. 2018, Charleston Regional Business Journal