If the bear market has kept you from setting money aside for your child’s college education, you’re not alone.
Because of the economic crisis, 47% of parents are saving less or aren’t saving at all for their kids’ education, according to a Gallup survey released in May by student-loan provider Sallie Mae.
While not saving for that degree may have felt like a smart move while the stock market was crashing, the need to fund your kid’s college account has only grown. For the 2008-2009 school year, the average cost of attending a four-year public school for in-state residents — including tuition and room and board — rose 5.7% to $14,333, according to the College Board. The cost was up 5.6% to $34,132 for a private university. (These numbers aren’t adjusted for inflation.)
Meanwhile, the value of 529 college-savings accounts sank 21% last year, according to Boston consulting firm Financial Research, leaving families with far less tuition money than they had counted on. A 529 plan is a tax-advantaged investment plan offered by individual states.