Saving for College: Where to Start

Every parent knows it’s important to save for college, but it’s hard to know where to start. But as the cost of a college education continues to rise with no end in sight, creating and sticking to a savings plan is crucial to avoid crippling student loan debt.

According to Mark Kantrowitz, publisher of and, over a 17-year period, the cost of college increases by about a factor of three. That means children born today will pay three times the current cost for a degree when they are ready to go off to college.

“Every dollar saved is a dollar less you are going to have to borrow,” says Kantrowitz. “Every dollar you borrow will cost you $2 by the time you pay back the loan.”

According to Frank Fantozzi, CEO of Planned Financial Services, before parents decide what financial vehicle to house the savings in, they must calculate how much they can realistically set aside from the household budget without hurting their own retirement prospects.

“You have to determine what you have to save to retire at a decent age,” says Fantozzi. “If there’s not enough money to go around it puts parents in a difficult situation.” Financial experts say figuring out the cost of college and retirement simultaneously provides parents a savings goal as well as provides children with what they are expected to contribute.

“College costs are becoming so absorbent parents get pulled in to fund more money than they should,” says Fantozzi.

Parents can get a sense of what kind of school their child might be interested in attending by evaluating their interests and activities. “What they are strong in [as teenagers] will give you a good sense of what industry they are going to be majoring in,” says Kantrowitz.

“You’re not really going to know until the kids get to junior high or high school what kind of student they are or what kind of career they will go after. Understand that the career dictates where they go to school.”

With that said, he suggests parents have children take a career aptitude and have their natural behaviors measured to identify any potential career paths. “Investing the money to profile children to see what kind of environment they would be good in is a worthwhile endeavor.”

In addition to putting money into financial vehicles like a 529 college savings plan, parents can also try to curb tuition costs through scholarships—and it’s never too early to start looking. According to Kantrowitz, there are a plethora of scholarships for children under the age of 13 and upwards.

“The sooner you start saving and searching for scholarships the better off you can be,” he says.