The cost of a college education in the United States is continuing to rise, as is the debt load carried by students. Both of these trends are worrisome because the worldwide movement toward competitive economies based on well-educated workers means that future workers will need to invest in a college education to make a decent wage.
According to the College Board, tuition at four-year public colleges rose this year by 4.8 percent. Also, Indiana public university students now rank 11th in the nation for the average education debt they have. That average debt is $27,500, which is $900 higher than the national average for students earning a bachelor’s degree, according to an Associated Press article based on a Project on Student Debt report.
So what should a college-bound student do to raise cash and control the cost of college? Plan ahead is the best advice we can give.
Indiana families can take advantage of the College Choice 529 savings plans that allow families to sock away money for future college expenses. This plan also gives the saver a 20 percent tax credit up to $1,000 on their contributions.
There are also many private savings plans and investments that can help families build nest eggs for future college expenses.
The time to plan for college costs is not the year before high school graduation. By that time, students without a hefty savings account will be forced to finance their college education by borrowing through public and private sources. And just a tip here, not all students qualify for the lower public loans and must seek out higher-interest private loans.
While all public colleges offer scholarships and grants to qualifying students, even with those gifts, college costs are very steep. According to The Associated Press, Indiana University student debt averages $28,434 and $27,268 at Purdue University. That means a graduating college student, if they can find a good job, will be paying off their loans for many years. That debt burden may mean those students will have to delay buying a home, purchasing a car, or providing adequately for their young family.
These new cost and debt numbers should be noted by families who want to send their children to college in the future. We still think that a college education is a good way for Americans to ensure they earn more during their lifetimes. But in order to afford that education, steps should be taken early to save for a college career.