Saving for College: Doable or an Impossible Nightmare?


Did you know 50 percent of families save for their kid’s college education? If you didn’t know, chances are you’re part of the 50 percent that doesn’t save – and, hey, there’s nothing wrong with that! Lots of financial advisors urge parents to think more about saving for their retirement, rather than saving for their kid’s education. But what about the families that don’t have the financial means to save for college? Surely, these families make up some of the 50% that doesn’t save. These moms and dads would love to pay for a college education for their children, but financially it’s simply not affordable.

In a perfect world, every parent would have the financial ability to save for a college education. But, the world isn’t perfect, and that means some families will not be able to afford college. Quite surprisingly, many of these families are not what society considers poor. You may come from one of these families, and understand that although you earn a decent income, college simply costs too much.

Since 1997, college costs have risen drastically. The Huffington Post reports: “The average cost of a four-year, non-profit private college is $35,000…The average annual tuition for a two-year public school is $7,000.”

Of course, financial aid will cover some of these costs, but it’s not going to pay for everything… And, $35,000 is more than some people earn in a year…

So, what do you do?

Do you continue to feed your retirement, and leave your child at the mercy of Financial Aid, students loans and hard work? Or, do you save? Over the course of 18 years, you would need to put away nearly $2000 a year. That’s over $150 a month, and that only pays for the first year… You can quadruple those figures if you plan to send your unborn child to a four-year college.

(Again, it’s not a perfect world, and — more than likely — your child/children is older than infancy.)

Checking in with the Experts…

Let’s consider, for a moment, what Suze Orman, an internationally acclaimed financial expert, has to say about saving for your kid’s education.

It’s really hard to believe. September is almost here, and the kids are getting ready to go back to school. For many of you, the school that we are talking about is college. But even if it’s primary school, sooner rather than later, college tuition will loom large for every parent out there… If educating your child is one of your priorities, the time to save is now. In my opinion, the best way to do this is with a so-called 529 Savings Plan.”

Okay, thanks for the advice, Suze. Does a 529 Savings Plan benefit a parents who are living paycheck-to-paycheck or middle-of-the-road? Unfortunately, Suze doesn’t have an answer for that question, and it’s rather assumed that this government-backed plan is affordable for the average American.

After some digging, it was determined that a 529 Savings Plan isn’t a good idea for anyone who makes less than $150,000 a year. In order to get the most from an investment, it needs to be put away for a long time (decades, nothing less than three or four), and parents need to aggressively fund the account. …So, the best bet for college savings isn’t a good bet for normal people


Before you do anything, you need to get your credit straight. You want that score nice and high because most of these suggestions are credit related. If you’re struggling with credit issues, a credit repair service can help you. Just make sure you look for a reputable company because there’s a lot of bad ones out there. Look for sites (ie., which list reviews and testimonials on their website.

It may not be printed in any smarty-pants-economics-professor’s textbooks, or in the myriad of financial advice websites, but there are ways to creatively save for your kid’s college education.

Remember: You don’t have to contribute to your child’s education. As was said before, many financial experts warn against it.

But, if you truly believe that contributing to your kid’s education is an important thing to do, more power to you – either way you’re a great parent that cares, and that’s excellent.

  1. Fund your retirement account, and then borrow against it.
  2. Borrow against your home by taking out a home equity loan or a home equity line of credit.
  3. Take out a personal loan.

Depending on your credit, you may get a better loan rate than your child. Although, that’s doubtful because education loans tend to have lower interest rates. If you really want to help, why not assume your child’s loan payments until they’re established. Most education loans don’t require the student to pay while he’s attending school, and offer a two-year grace period following degree completion. During this time, you can make payments and begin the process of paying back your child’s loans.

When it comes to government and education, the country has never been fair to those citizens unable to save thousands of dollars a year. But, you’re not alone! If you let your voice be heard, you will be sending a message that more programs are needed, and better options should be available to smart kids with lower income parents.

About the Author

Jenna is a freelance blogger who is most often writing about finance and savings, especially for families. In her spare time Jenna is usually reading, riding her bike, or working on some wacky DIY project!



  1. 1

    My kids are little and it’s definitely something I think about, but haven’t started saving for yet.

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