With the rising cost of tuition and a greater number of young adults planning to further their education, more parents have already started saving for college. This expense is a financial burden to many households, but they may be able to use a cash loan near me to cover any unexpected bills once their children are away at school.
So far this year, 45 percent of parents have saved at least $5,000 per child to attend college, according to a survey conducted by the College Savings Foundation. This was an increase from 40 percent last year, and the highest level recorded since 2021, when 49 percent of parents were in a similar position.
Meanwhile, many of the parents already putting money away utilize 529 college savings plans. Under this program, users can put away money specifically for college that will be exempt from federal taxes.
However, even with more consumer cash funneled toward education, many parents expect their children to help out with costs, the survey found. Specifically, 69 percent of parents took this stance, which was a significant increase from a year earlier, when 62 percent of parents shared similar expectations.
Student Debt Still A Concern
Although parents and getting better about saving for college, many students will still need to take on loans. Specifically, the survey revealed many parents believe their children will be paying off student debt for at least five years after graduation, which can have a major impact on their postgraduate budgets.
Paying off student debt is a task many graduates have to deal with. In fact, graduates from the class of 2022 left school with an average of $27,200 in debt, up from $17,600 in 2012. However, with careful planning, you may be able to escape from under the thumb of student debt sooner than expected.
Address Variable Debt First
Variable loans account for approximately 15 percent of all student debt. These loans come from private lenders, rather than the government, and often come with higher interest rates, making them more expensive over time, according to Real Simple.
Allocating a majority of your payments toward these loans could save you a significant amount of money in the long-run. However, make sure to continue making minimum payments on your fixed-rate federal loans.
Consider A Compensation Package
Nowadays, certain employers offer compensation packages to help employees pay off student debt. Some companies can’t afford to pay entry-level workers competitive wages, but do offer programs such as this to stay appealing to graduates.
Even if the company doesn’t offer this benefit upfront, you may be able to address it during salary negotiations. Although this could require you to stay in a low-paying job for an extended period of time, investing this time could be worth it.
Consolidate Your Loans
You may be able to roll the balances of multiple federal loans into one. This can make budgeting easier, since you will only need to make one single payment every month. In addition, this could help you lock in an interest rate lower than your current one.