College Planning

Planning for Your Child's College Expenses

The earlier parents start saving for their child's education, the less stressful financial planning will be down the road. This article explores steps parents can take now to plan for the future.

Building an Effective College Fund Requires Planning

According to the Sallie Mae “How America Pays for College” national study, only 38 percent of families today have a plan for how they are going to pay for their children's college education, with 51.5 percent of parents wishing they had started saving much sooner.1

The importance of planning for unexpected expenses

Like most things in life that require planning and saving, the sooner you get started saving for your child's college education, the better. So when the time comes, you can both take the next step with a lot less financial stress and worry.

One of the most important things to come out of this study, is that as a parent, you can't assume that financial aid will be enough to cover all of your child's college costs. With such a large expense, it's no wonder that one-third of all families run into more than one unexpected expense when it comes to paying for college, once again, making the importance of planning ahead paramount.

So just how are Americans paying for college expenses? According to the study, both students and parents are managing to pay for college expenses from the following sources:

  • Parent income and savings: 30 percent

  • Grants and scholarships: 31 percent

  • Student borrowing: 15 percent

  • Student income and savings: 12 percent

  • Parent borrowing: 7 percent

  • Relatives and friends: 4 percent

And in addition to income and savings, both parents and students are implementing frugal choices as part of their overall planning efforts in order to meet their college expenses. The findings in this 2015 study, reinforce the benefits of planning ahead and proactively saving. As such, Sallie Mae recommends the following 1-2-3 approach when it comes to getting started with your own individual college savings plan:

  1. Open a savings account.

    Set up and designate a savings account as your college fund. Deposit gifts from friends and family, and sign up for free services that let you earn cash back to save for college.

  2. Make regular contributions.

    Set a goal, and create a routine of adding money. Even a little bit adds up over time, and automatic deposits make saving easy.

  3. Explore tax-advantaged options.

    Put your money to work using dedicated college savings programs like Coverdell Education Savings Accounts, prepaid state college savings plans, and 529 college savings plans.

For more information on college planning and saving for college, visit the Protective Learning Center.


1. https://salliemae.newshq.businesswire.com/sites/salliemae.newshq.businesswire.com/
files/doc_library/file/HowAmericaSaves2015_FINAL.pdf

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

College Fund

Creating and building a solid college fund for your child or children requires planning. This article looks at a recent study on the importance of starting a college fund early, and how you can get started. Protective Life explores tax-advantaged options, including 529 college savings plan. College funding can be difficult but it is much easier the earlier you start. Let Protective Life teach you how to start a college fund.

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