When it comes to finances, what do you think are the two biggest areas of concern for adults with children?

Here’s what an April 2015 Gallup poll said:

  • More parents worry about how they are going to pay for college than they do about their own retirement.
  • 73% of those surveyed said they worry more about college than their retirement.
  • Even parents making $100,000 or more are worried.   61% said they were worried about having enough money to pay for their children’s college.

Grandparents are also worried and are helping their grandchildren like never before.  A 2014 Legg Mason study:

  • 2/3 of grandparents whose grandchildren are planning to attend college in the future are chipping in to financially support their education.
  • Nearly 40% contribute to the costs for grandchildren currently in college.

Why is everyone worried?

  1.  They may still have their own student loan debt and are concerned about how to help their children.  In 2013,  seniors age 65 and above totaled $18.2 billion, a 650 percent increase from $2.8 billion in 2005.  On the other end of the spectrum, Fidelity’s 9th Annual Study for College Savings told us that56% of Millennial parents are still paying on student loans.
  2. The sound bites and statistics are scary.  By the end of 2015, student and parent college debt rose to almost $1.3 trillion.  The average debt for students graduating with a bachelor’s degree is $37,000.According to the Brookings Institution, the typical new graduate is likely to devote 14% or more of his or her paycheck to student loans. For those with fine art or therapy degrees, it’s closer to 20%.
  3. The cost of college continues to increase.  According to the College Board, the average cost of a four-year, private college, including room and board has climbed 53% in the past 10 years to $43,921. Many cost over $65,000.  But it is also true that many are priced far below the average. And the sticker price is not what families usually pay.
  4. Parents feel overwhelmed and guilty that they are not doing enough to help their children.  Few feel that they can save enough.  So they do nothing.

Here’s what you can do to help them:

  1. Be the source and conduit for factual information, tools and services to empower families to take action: Here are some important — and often overlooked — points:
    • Saving for college will likely be only one part of the total college financing plan — but is the element that can be acted upon very early in the life of a child.  Saving a little now can have a significant impact later.  Read about how the “Rule of 70” simplifies compound interest for your customer’s needs.
      • 529 College Savings Plans are very effective for  many families:
        Screen Shot 2016-02-12 at 9.19.12 AM
        Learn More: Contact Invite Education

        529s are very flexible; provide tax advantaged savings; permit grandparents, parents and others to contribute to to each child’s college savings plan; allow up to five years of gifting up- front and offer penalty-free opportunities to switch beneficiaries.

      • Currently, there are more than 12 million 529 accounts open in the U.S. with over $250 billion — that’s 1/4 of a trillion dollars — saved for college.  So we’re making some good progress in the savings area.
  2. Leverage Invite Education’s platform to provide a value added service to your customers while growing assets under management and cross-selling products to grandparents, parents and students

Invite Education’s College Center is a cloud-based tool that is seamlessly added to your public web site or to select clients who need the most help.  You likely do not have the expertise on staff to update and keep college related information current and fresh.  Invite Education offers a complete planning platform that’s perfect for families managing the college process as early as Pre-K all the way to senior year of high school.

Younger families are guided to a savings plan that is right for them to help families take control of their future plans. Along the way, as the student progresses grade by grade, admissions and testing criteria are highlighted in preparation for the academic competitiveness involved.  As college nears, scholarships and financial aid are highlighted along with cost analysis and comparisons to help finalize school choice.  Finally, after all other funding avenues have been secured, student lending insight is provided to help families make wise decisions about debt.

It’s good business to help your customers — and their children, (aka your future customers!) — with this very critical need.

 

 

 

About the Author John Hupalo

I am the Founder of Invite Education -- dedicated to empower families with information, tools and services to make better decisions to minimize/avoid debt while finding the best academic and social college fit.

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