71% of People Providing Financial Assistance for College Worried About Covering the Cost

While college students may have people supporting their education financially, the cost of this higher education is worrying many of these contributors.  Learn more in the following post.

School might be out for summer, but a new nationwide survey conducted for TheStreet’s MainStreet by GfK North America finds that one in three adults are currently helping or planning to help pay for a child’s higher education, and that 71% of them are worried about how they will cover the cost.

The survey also shows that of those saving:

• 79% are parents, 10% are grandparents, 4% are aunts/uncles
• 53% are using a savings account, 31% are using some type of investments, 24% are using a 529 savings plan or prepaid tuition plan, 14% are using life insurance, 11% are using a Roth IRA
• Those with an income of over $75,000 (25%) are more likely to use 529 plans than those with an income under $75,000 (11%)
• On average, they are saving $6,850 annually towards college

Ross Kenneth Urken, TheStreet Personal Finance Editor and MainStreet Editor

“MainStreet’s new survey shows that those saving for their children’s or grandchildren’s college education are spooked, and who can blame them?” said Ross Kenneth Urken, TheStreet Personal Finance Editor and MainStreet Editor. “The real challenge is for these people to figure how to face the increasing severity of the student debt crisis by either saving more or finding less expensive options when it comes time to pick a school.”

For those worried about the financial burden of higher education, MainStreet offers the following outside-the-box savings options to avoid getting saddled with debt:

·         Think In-State: Great schools like the University of Virginia only cost $12,000 for those in-state and in certain parts of the country, states have grouped together to form “academic common markets.” To get access to a particular dream school at “in-state” prices, you don’t need to be in-state.

·         Go to a public institution or start at a two-year school: New York University is the most expensive private school  (with an annual price-tag of $60,407), but according to the National Center for Educational Statistics, the annual price for public colleges is more than $18,000 less than the average price of private ones.

·         Go over the border: Scotland’s St. Andrews and the University of Edinburgh—not to mention Trinity in Dublin Ireland—are prestigious institutions at a fraction of the cost of American private schools. To boot, McGill University and Concordia University in Montreal are 3/5 the cost of tuition at comparable private institutions in the U.S.

·         Go with an MOOC (a massive online open course): MOOCs first appeared on the higher education landscape in 2008 but gained traction when top universities endorsed them and provided access to their courses. The popular providers of MOOCs include Coursera, Udacity, edX and NovoEd.  You can get a top education without paying $50,000 a year. The legitimacy is ever expanding: the American Council on Education recently approved five Coursera courses for degree credit.

·         Get Crafty: The Department of Education College Affordability and Transparency Center generates reports based on your selected criteria and reveals the lowest-priced tuition in the U.S. is only $910 at the private Berea College in Kentucky, and somehow almost half that ($430) at that lowest-priced public school: Haskell Indian Nations University in Kansas. It may not be Harvard, but with tuition that low, you will put less stress on your savings.