Last month, Ronnica talked about how she paid off the last of her student loan debt–five figures in a a mere eight months. *thunderous applause*
It got me to thinking about the many ways one can fund their (or their children’s) education and which way is the “best”. Here are a few I’ve come up with:
1. Student pays it all.
2. Parents pay it all.
3. Some sort of combination between parents and student.
5. College savings plan (Coverdell, 529, etc.)
Of course, there is the combination of the above, and the “other”, which, in addition to scholarships, is how I funded a good portion of my education (my mother died when I was young, and her life insurance was her final gift to my brother and I). And there are those who opt to join the work force or military (which pays for education) in lieu of going straight to college.
Realizing that my young kiddos will be leaving the nest sooner than I care to admit, this idea of “how to pay for college” is something I’ve been struggling with lately; I can see merit to many of the options available. Having a student fund all or part of their education commands the student take ownership of their degree. It may also inspire them to make different choices (like in-state versus out-of-state).
But you don’t have to look far to see stories regarding the mountains of debt the average student accrues today. At the same time, the economy seems slow to recover from the Great Recession, so many parents can’t fund a savings account (529, Coverdell, or otherwise) for their children’s education even if they wanted to.
So what’s a parent and good steward do?
Good question. It’s something I’m still trying to figure out for myself. I certainly don’t know what’s best for every family. Circumstances (and priorities) are different within each.
For our family, we nickel-and-dimed a start to a Coverdell Education Savings Account (aka Education IRA) for the kids. I say “nickel-and-dimed” because that’s literally what we did (incidentally, this is a tactic that Ronnica hits on in her debt-free post): We funneled extra change into the kids’ piggy banks until there was a decent enough amount to start funds for them, and we add to them automatically each month. Unless something changes in our circumstances, however, our kiddos will likely have some sort of combination of the payment options above.
What have you done in your family?
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