The cost of college is one of the biggest financial challenges many American families will face, so it’s no wonder concerns about the ability to pay off the resulting student debt is also increasing. In fact, according to Fidelity Investments®’ recentCollege Savings: Lessons Learned study, nearly half of current students and recent grads alike describe themselves as “stressed out” about the level of student debt they’ve accumulated—and many are afraid they’ll never pay it off. One solution to help ease the stress? Talk as a family about a strategy for saving as much as possible before the first tuition bill is even due.
The good news is, when it comes to understanding the total cost of college, today’s current students appear to have more realistic expectations about what to expect before entering their Freshman year. Encouragingly, compared to recent graduates, today’s undergraduates are more likely to have made smart choices that can help lessen the stress by reducing the cost. This includes entering a community college or two-year program to kick off one’s education or limiting college choices to what is truly affordable.
Even so, what was the no. 1 answer by all respondents to “if you knew then what you knew now before entering college, what would you do differently?” According to the study, 42% said they wish they had started saving for college earlier, if they knew then what they know now. To help future college students better accomplish this goal, the study uncovered a number of strategies many respondents could have used to better unlock their college savings potential, such as funding a 529 plan or taking advantage of a college rewards credit card. Another all-too-often overlooked critical component: talking earlier as a family to develop a sound college planning strategy together.