As summer approaches, this can be a great opportunity for high schoolers to start saving up for their future college. Start saving for college when you are young and aim to save about one third of future college costs. But the big question is, what is a good way to start saving for college?
Some of the many choices for students to afford college are scholarships, grants, and financial aid. Colleges, states, and the federal government give out grants, which don't need to be repaid. Most are awarded based on your financial need and determined by the income you reported on the Free Application for Federal Student Aid, or FAFSA. However, according to Student Loan Hero, 69% of college students took out student loans, and they still graduated with an average debt of $29,900, including both private and federal debt. Meanwhile, 14% of their parents took out an average of $37,200 in federal parent PLUS loans (Student Loan Hero). Many juniors and underclassmen are aware of this as it is one of the most deciding factors for college decisions. According to Angela Gill, a student who has experienced this first-hand, “college has been so inflated that the majority of their students can’t even afford it anymore. It’s so bad to see people in their 30s still paying off thousands a month from school a decade ago.”
Now that we covered why college savings are important, let's focus on where to start. While grants and scholarships are a very big student savior, “there are many students who might fully depend on those who might not always get these college grants or full-ride scholarships'' severely impacting their college process (Alexander Zotos, 2021). That's where a solid college savings account or part time job is always the way to go. Financial Aid appeals, Emergency Grants, or Work-Study jobs are on the rise at college campuses. The most common savings plan, the 529 saving plan, allows for families to grow their savings tax-free as long as the money is spent on qualified educational expenses. According to the U.S. News, More than a third of parents (37%) used a college savings account, like a 529, to help pay for college last year and it is still on the rise (U.S. News).
Most importantly, college is going to be a new chapter for everyone so it is so important to start doing these tips early to prepare before getting swamped with bills that might ruin the college experience.