As a parent knee-deep in division, the fundamentals of reading and — for my toddler — the recognition of A, B and C, college seems a long way from now.
But Jolene Ignarski, senior branch manager for a Fidelity Investor Center in the East Valley, said it may be the best time to start thinking about how my family is going to fund college for three kids.
Parents needs to start taking baby steps early — even as soon as kindergarten — to meet their financial goals for post-high school education.
“Unfortunately, they’re (parents) not coming in when (their kids) are 5 or 6, but the majority come in later, when they’re a freshman or junior in high school,” Ignarski said.
Her experience follows a Fidelity report out last week that shows Arizona parents are behind when it comes to saving for expected college expenses, such as tuition, room and board and books.
According to the sixth annual College Savings Indicator report, Arizona parents hope to pay 52 percent of their children’s post-college education, with the rest covered by scholarships, grants, gifts from grandparents and loans. But when the survey asked about how much parents have saved to meet their personal portion, they’re on track to cover only 28 percent of their goal.
“I don’t think they have a realistic view of the expenses. And sometimes there is some surprise in that,” Ignarski said.
That’s also signaled in the survey by the amount of debt parents expect their children to have after college.
Parents of children attending college this fall believe their child will graduate with $14,600 in debt. But the national Institute for College Access & Success’ Project on Student Debt found that the Class of 2010 graduated with $25,250 of debt.
To help manage the rising cost of tuition, parents surveyed said they would also consider having their child live at home (64 percent), encourage their child to attend a public school (51 percent) and encourage their child to graduate in fewer semesters (31 percent).
More than half of parents will also ask their child to put aside his or her own money to pay for college.
The Fidelity report was generated from a survey of more than 200 Arizona parents with children ages birth to 23. More than 70 percent of respondents have more than one child.
Ignarski recommends families consider a 529 college savings plan. The plan was created in 1996 by the Small Business Job Protection Act. There are tax benefits on the earnings as well as the distributions that are used for a qualified educational expense.
“What we try to impress is just start saving early. Take advantage of a 529 account. That’s really the best account for that. And have realistic conversations with their children and involve them more,” she said.
“Parents have taken that responsibility (paying for college) in the past, but there should be that shared responsibility, shared sacrifices and, hopefully, that shared optimism.”
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