With a whopping 70 percent of college graduates currently struggling with some amount of student debt, millennials are thinking ahead and hope to prevent this dilemma for their own children.
According to Mathew Simonsen of KETV Omaha, students “graduated with an average debt load of nearly $29,000 in 2014, so it’s not surprising that Millennials are looking to get a head start on saving for their kids’ college tuition.”
Being the largest living generation, having lived through the economic crisis of 2008 and ever-growing college expenses, it comes as no surprise that as Generation Y transition to starting their own families, they hope to help their kids avoid these horrendous debts.
This unfortunate reality is that living and working with student loans has become the norm for more than half of college graduates, motivating many students who are still dealing with their debts to start saving funds for their children.
“There are different methods to saving for college, which is why the experts said it’s important for parents to scrutinize their budget to know how much they can afford to save and identify their investment risk tolerance,” said Simonsen.
It can be difficult to prioritize a college fund for children when there are still retirement savings, healthcare, and many other lofty investments that must come into account. Certified college planning specialist Beth Walker advises that “millennials aim to save 20% of their earned income, with 10% earmarked for retirement and the other 10% going toward future goals like buying a house and having kids.”
Katie Lobosco of CNN reported “Nearly half of parents in their early thirties intend to foot their kids’ full college bill.” Although millennials are still quite young to be considering a college fund for their kids, it seems that thinking a bit prematurely will save parents, and their children, a large amount of financial burden and stress in the long run.
