As tuition rises, college expenses can be very daunting and impossible to save with competing priorities. It is important to remember, however, that it is crucial to begin saving regardless of the amount you’re able initially. Historically, financial markets delivered returns over long time periods, as well as the principle of compounding. That means starting sooner is better than putting off until you can save more.
Parents (and grandparents or other relatives) may also wonder how much of their child(ren)’s future college expenses they will need to save versus financial aid from scholarships, loans, and/or grants. Unfortunately, this is difficult to know, especially if your children are young and might be almost two decades away from attending college.
“Rule of thumb” estimates students or students’ families may need to save anywhere from one-fourth to two-thirds of expenses while the rest can come from a combination of scholarships, grants, and loans in addition to the parents’ income during their child’s college education. Keystone Financial Group can review existing college savings plans to ensure that they are invested and titled in the most effective manner for not only growth, but also increase potential of financial aid. Our team can also help navigate existing student loans and implement strategies to determine a process to pay loans off in the most cost effective manner.