Moms Talk: Saving for College

President Barack Obama announced Wednesday that he will authorize changes in federal policy to make college loans more affordable and easier to repay for millions of economically trapped borrowers.

To read the President's entire speech on the topic this week, click here.

I have many friends who struggled for years to pay back their student loans. I have some friends who are in their thirties and are still paying.

According to Dave Ramsey (financial wizard who often irritates me because his sage money-saving advice interferes with my penchant for new books and manicures), the average college student today graduates with about $15,000 in student loan debt. What a heavy weight strapped to a graduate’s shoulders fresh out in the job market!

My husband and I were very lucky. I received a full academic scholarship, and his parents paid for his college education. That doesn’t mean we can’t empathize with friends who didn’t get those breaks. We started our family at a very young age, and we struggled financially for years. What it would have been like if we’d had to add student loan payments to our already strapped budget boggles my mind.

We don’t want our kids to have to deal with that burden, so we want to prepare and have money socked away for their college educations. We’ll help as much as we can. We still expect them to contribute something to their educations, but we can at least give them a good start. Life lessons they’ll learn by saving and working for their degrees are just as important as what they’ll learn in school.

So now we come to it. Saving up for your precious baby’s future education. That sounds fantastic, right? But for many of us, it’s easier said than done.

I spent some time researching different mom-friendly plans and ideas for saving money for college, and I found a few that were pretty cool. With a child who will be attending college in six years, I have a vested interest in getting the biggest bang for my buck and getting her off to a good start.

Of course, the most popular way to save is with a 529 college savings plan. You can open one of these state-sponsored accounts with as little as $5. And your savings grow faster because the money grows free of federal and state taxes, and withdrawals are federally tax-free if used to pay for qualified education expenses, such as tuition, fees, room and board and books.

Upromise is a free rewards program that helps members get money back for college from their everyday spending. It probably shouldn’t be your only savings plan, but it’s a great way to get money into your child’s college fund simply by buying things you would buy anyway.

The Gerber College Plan is another option. Its most appealing factor to me is the adult life insurance protection. If the unthinkable happens before your college plan reaches maturity, the full benefit amount is paid to your child (as beneficiary).

Are you already saving for your child’s education? Do you have a clever method for doing so? Want to share it?

Did you labor under the heavy burden of student loans? Did that make you even more determined to help your kids with their education costs?

Please join in the conversation by leaving a comment below.

Let’s talk it out!