According to the Consumer Financial Protection Bureau, the number of consumers age 60 and older who have outstanding student loan debt quadrupled from 2005 to 2015. 

This may seem astonishing, but as we take a closer look, we’ll see that the bulk of their debt stems from loans for a child’s and/or grandchild’s education. Many of these individuals are taking on the burden of debt to benefit future generations.

It’s no secret that college education today comes with a hefty price tag. When our twins were born, I was instantly calculating the cost of the University of St. Thomas (my alma mater) and the cost of the University of Minnesota (my wife’s alma mater). At the time, it was looking like it would be $30,000 to $40,000 annually per child, equating to nearly $160,000 per child or $320,000 total. After my third child, the figures got even more out of hand.  So, what can you do?

1.  When your first child is born, think about what kind of educational support, if any, you wish to give him or her.  Do you wish to pay for a technical school, undergraduate or graduate studies? Will you cover any school, or is it your wish to cover the state school equivalent, for example? This will give you a good idea of how much you need to save by the time your child graduates high school and will set a precedent for saving for another child.

2.  Be sure to automate your college savings. If your goal is to pay for the equivalent of half of a state school that averages $30,000/year, then you know you are shooting for $15,000/year in tuition, and in the case of an undergraduate degree, $60,000 total, in today’s dollars. To make this calculation easier, you can use Fidelity’s online calculator that will help illustrate how much you need to save if, for example, you are paying for 50 percent of a state school equivalent.

3.  Take advantage of tax favorable investments. Some state 529 plans offer incentives to invest in their plan by offering state income tax benefits or matching dollars. For example, North Dakota newborns can get up to $200 and many North Dakota residents are eligible for a match. You can also use Fidelity’s calculator to see if you are able to get a state tax deduction.

4.  As your child nears college age and is narrowing his or her college choices, pay close attention to ACT/SAT scores and GPAs, and evaluate schools based on those scores and grades. Let’s say your student maintains a 3.5 grade point average and received an ACT Score of 25. Most schools will offer scholarship opportunities for above average numbers, which may make them more competitively priced than at first glance. Here are some examples below:

There are many ways to budget, prioritize and stay on track with college savings, and while it can be overwhelming at times, always remember that you are not alone. A CERTIFIED FINANCIAL PLANNER™ professional can help you create a college savings roadmap and provide guidance on additional ways to get the most out of your savings along the way.