A college education may be one of the biggest investments you ever make. Though it’s difficult to save for such an expensive goal, it’s worth it – a college degree can open doors to better jobs and a better lifestyle.
Use the advice and tools in this section to start planning for your education goals today.
Why college planning?
It’s important to start saving for college as soon as possible because:
College costs are rising
Today, college costs approximately $61,000 for four years at an in-state public school and $147,000 for a private school, and costs are rising faster than normal inflation rates.
In 2027, in-state public school expenses are predicted to reach more than $146,000 and private school expenses will be more than $353,000*. If you want to afford college in the future, it’s important to start saving today.
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College is a great investment
A college degree is worth planning for because it opens doors for higher paying jobs and a more comfortable lifestyle. The median income for a high school graduate during the first quarter of 2009 was $620 per week (approximately $32,000 per year), while a college graduate earned $1,024 per week (approximately $53,000 per year).
Who needs college planning?
If you have children, grandchildren, nieces, nephews or other loved ones whom you would like to help out financially, you can give them a wonderful gift by investing for their college education.
Even if you can only contribute a small amount each month, your gift has the potential to grow over time and be much appreciated by your loved one. Plus you may qualify for tax advantages when saving for another’s college education.
How to save for college
With guidance, planning and open mind, you can reach your college savings goal. Contact a Modern Woodmen representative for help at any time or start by taking these three steps:
1. Start now
It’s never too soon to start saving! If you start investing a small amount of money every month toward your educational goal, your savings will dramatically increase over time.
For example: If you save just $100 a month at a 4 percent annual rate of return, your investment can add up to nearly $15,000 after 10 years and more than $31,000 after 18 years. No contribution is too small. With some college savings plans, you can make monthly contributions as little as $25 and still receive tax advantages.
It’s never too late to start saving! No matter how soon you need the money, you can benefit from creating a solid college savings plan today.
2. Save systematically
You’ll be able to save a lot more for college if you save consistently. Make it a part of your monthly budget to set aside enough money. Through payroll deductions or automatic withdrawals from your bank account, you can save money for college each month before you have the chance to spend it on something else.
3. Explore your options
If your child or loved one is approaching their sophomore year in high school and you don’t have enough money saved to afford full tuition, it’s time to start exploring other options, such as:
Financial aid and scholarships
As college costs rise, more grants, scholarships, student loans and work-study opportunities are becoming available. In the 2007-2008 school year, students received more than $143 billion in financial aid. Over the decade from 1997-1998 to 2007-2008 total student aid increased by about 84 percent in inflation-adjusted dollars.
To get information about grants and scholarships that your student may qualify for, start by contacting the high school guidance counselor and an admissions representative at his/her college of choice.
Many college students pay for all or part of their own college educations by holding part-time jobs and going to school full-time or vice versa. During summer break and other holidays from school, students can save a lot of money by living with their parents and working full-time.
An adult who would like to contribute financially to a child’s education but does not have enough money saved can pick up an additional part-time job and put some or all of that income into the child’s college expenses.
4. Protect your college dreams with insurance
Premature death or disability can devastate even the most carefully thought-out college savings plan. You can protect your loved ones’ educational goals by having enough life and disability insurance to complete your college savings plan no matter what. You can even take advantage of a life insurance product that builds cash value to assist with your college expenses.
How to start college planning
For help with your college planning needs, contact a Modern Woodmen representative in your area.