$1.75 trillion. It’s an eye-popping amount. It’s hard to even truly understand just how much money that is. That number is the amount of student loan debt in this country. 48 million Americans have student loan debt with an average amount of $28,950. For those Americans, it can easily turn into the proverbial rain cloud, following them around and weighing on their financial future.
Since 2002, the average cost of in-state tuition and fees at public national universities has risen from $17,938 to $43,775. That’s a drastic increase of 211% whereas normal inflation has only been around 54% in that same period. Even doing simple math, one can quickly tell that at this pace, the cost of college in 18 years looks scary.
So how do you plan to pay for that? It all starts with the initial goal. Are you looking to take some of the burden off or is it a free ride for your child? Once that is narrowed down, it is about what is the best vehicle to save with. There are many options out there which include 529’s, UTMA’s, Roth IRA’s, etc. Each has its own pros and cons. Lastly, you will need to decide how much to fund the accounts with based on your goals.
Education planning is a complicated process and the route to reach the goal is not always a straight line. Life changes quickly and children often change their path multiple times over. Working with an advisor can help you navigate the complexities of planning and set you on a path to provide one of the greatest gifts you can give.