Choosing to go to college was one of the best investments I’ve ever made.

Doing so not only opened doors for me, it also taught me how to become a lifelong learner.

Even so, my post-secondary education journey wasn’t so smooth from the start.

You see, during my first two years in college, I was lost in this new world of higher learning.

And so, I found myself barely scraping by with a 2.0 GPA because I didn’t have anyone to show me the ropes.

But, during my junior year, as I settled into my chosen business major, everything seemed to change.

School wasn’t just about memorizing facts anymore.

No, it quickly became about understanding and applying the knowledge I was learning.

And so, for the first time, I saw the true power of education.

I saw how I could apply what I had learned at night school to my job in the morning, which allowed me to make incremental strides in my career.

So then, with this newfound motivation, by the time I finished grad school, I made the Dean’s List and graduated with honors.

Quite the turnaround, right?

Well, it certainly was, but here’s the kicker: because I’m a first-gen Romanian American, my family wasn’t familiar with the college system and we didn’t know how to prepare or save for it.

So then, despite my academic success, when it was all said and done, I was left with a mountain of student loan debt.

Now, if you’re a first-gen professional, then there’s a good chance that you’re starting to see yourself in my story.

Maybe you’ve struggled too, or perhaps you’ve wondered if traditional college is even worth saving for in a world ripe with self-learning opportunities.

Whatever your position may be, deep down, we all know how education can unlock incredible opportunities when applied in the right settings.

You know, when it comes down to it, most parents want to give their kids a head start in life.

And so, I know that if I’m serious about helping my kids get a leg up when it comes to their learning goals, then I need to help them finance their schooling without it becoming a burden to their future.

Indeed, if you’re anything like me, then you’ll likely want to consider options beyond paying cash out of pocket and begin funding a college savings plan, like a 529, sooner rather than later. Because if you don’t, your kids could be stuck making choices centered around getting out of debt instead of pursuing their life’s purpose.

The Rising Costs of Education

Now, as a parent, you likely don’t need me to tell you how the cost of education is rising at a rapid clip.

And, the trouble is that many high-earning parents believe that they can fund college expenses with cash, so they do little today to prepare for those expenses coming down the pike ten or fifteen years from now.

But here’s the thing: what you believe is a manageable cash expense today, could end up becoming an unruly cash burden down the road.

How so?

Well, consider this: the average cost of tuition at a public university went from about $1,200 per year in 1984 to over $9,000 by 2020, according to the Education Data project.

Now, that’s a growth rate of over 6% per year at a time when inflation averaged 2% annually!

But the thing is that that $9,000 figure is likely influenced by the more affordable cost of community college tuition.

That’s because the cost of attending a public university, like the University of Pittsburgh, currently runs around $22,000 per year. And, given the current growth rate of college expenses, that figure likely will likely double to over $50,000 in the next 15 years.

At the same time, if you’re planning to send your kids to private school, then the situation there is just as dour.

For example, in 1984, the cost to send your child to private university was nearly $14,000 in today’s dollars.

But, this figure rose to nearly $33,000 per year by 2020.

And so, by 2035, what do you think this expense could look like?

Well, assuming that costs continue rising at historic rates, this expense could easily average at least $80,000 per year fifteen years from now.

So then, either way you slice it, the cost of educating our children is on the rise.

And so, while most parents have good intentions and want the best for their children, the reality of a child working their way through college or having parents who are willing to pay for these expenses cash out of pocket could become a distant memory for many of us.

The truth is that more and more, students today are borrowing money to pay for their schooling needs.

Borrowing to Pay for School

In fact, based on the most recently available data, student loan debt nationally has risen from around $480 billion in 2006 to nearly $1.8 trillion in 2024.

Now, these are some rather large numbers that are hard to wrap our brains around, so let’s look at it a different way.

Let’s say we took those figures and divided them up among working-age adults in the US, we’d be looking at student debt here in the US rising from $3,300 in 2006 per working-age adult to nearly $11,000 per working-age adult in 2024.

So then, from this perspective, you can easily see how, in a short period of time, the cost of higher education is soaring, and student loan debt has unmistakably become a national crisis.

But you know, ultimately, we’re not just talking about numbers on a page, are we?

We’re talking about a barrier that can delay your and my child’s entry into financial independence.

We’re talking about obstacles that can limit their career choices and even in extreme cases, affect their mental health.

So then, for you parents out there, the question isn’t just about whether to support your child’s education, it’s also about how to do so in a way that doesn’t saddle your kids with decades of debt, right?

It’s about being prepared, so your kids can be spared.

Debt Pitfall: Borrowing More Than What’s Needed

Now, the bigger problem here is that when you’re not prepared to deal with these higher learning expenses, your child could end up not only loaded up on debt, but borrowing more money than they need.

Indeed, according to a study published by the think tank New America, college students aren’t just borrowing more money, they’re borrowing above and beyond their need simply so they can live lavish lifestyles.

Now, it’s worth noting that this report is based on latest available report going back to 2017 and utilizes data from students attending community college.

But, there’s a good chance much of the report’s findings can be applied to a wider variety of higher learning institutions as well.

And so, what did the study find?

Well, the study showed a couple of things.

First, it showed that the average annual cost of tuition at a community college was $3,570 in 2017.

But, here’s where things get interesting: the total cost of attendance, that is, the amount spent to include tuition and non-tuition expenses, was $17,580!

Can you believe it?

Only a fraction of student loan borrowing went to paying for tuition.

But, can I tell you something: this isn’t a surprise, is it?

You know, I’ll admit that I was one of those borrowers who foolishly followed this path.

In fact, I clearly remember how, during grad school, I took out private student loans to pay for tuition expenses and to supplement my lifestyle.

What did I buy? Windows for my new home…

But you know, back then, I had convinced myself that I was going to pay these loans off quickly.

And even though I knew the perils of taking on too much debt, I had convinced myself that my future earnings would be enough to make up for my higher debt load.

So then, when I went to apply for these loans through the school’s finance department, I got to choose a specific amount of money that I would need to borrow for the semester.

And you know what I did?

I borrowed the maximum amount that my lender would allow me to borrow for that semester.

For me, it was like getting free money…

I even tricked myself into believing how I’d use my tuition reimbursement from work to pay back the debt.

But, you know what happened?

You guessed it, I put off paying back the debt for longer than necessary, and it cost me in terms of opportunities later on in my career.

You see, not accounting for the higher education expenses isn’t just a matter of covering the cost of rising tuition.

It’s also about opening the door for your kids to unchecked borrowing that has the potential to sink their financial and life opportunities.

You know, the truth is that many parents grapple with the fear and guilt of leaving their children to fend for themselves in an increasingly complex world.

And this concern is especially relevant for first-gen professionals like you and me who might have navigated these waters alone and know the full weight of taking on debt to pay for school.

So then, saving for college isn’t so much about the money; it’s about managing the worries of our children struggling through the same financial hardships that we did.

It’s about avoiding the emotional and psychological toll of having to figure out how much to borrow, and then dealing with aftermath of borrowing too much that can affect both parents and children.

It’s about being prepared, so our kids can be spared.

How to Effectively Prepare for College Expenses

So then, with college expenses going up at a rapid clip, how can we prevent our children from becoming the next statistic when it comes to borrowing to pay for college?

Well, while the figures we’ve discussed here today might seem overwhelming, the good news is that there are some proactive steps you can take today, like establishing a 529 plan, so you can avoid the future regret.

And what better day than on May 29 (or 529 day) to safeguard your children’s financial future, right?

Well, the truth is that investing in a 529 college savings plan isn’t just about saving for college; it’s about giving your child the freedom to pursue their education journey and their life’s purpose without the shadow of debt hanging over them.

In fact, a 529 plan offers tax advantages, flexibility, and control that can turn your fears today into a foundation of support for your children’s tomorrow. More importantly, it’s a simple way to help you get started down the path of preparing your children for college.

Alright, so how do you get started?

Well, here are a few things I’ve done to help prepare my children for success and enable them to avoid the burden of student loan debt:

Step #1: Figure Out How Much You Need to Have Saved

So, start, you’ll want to figure out how much you need to have saved in 10, 15 or 20 years to pay for your kids’ education needs.

That’s because understanding the exact amount you need to save for your child’s education sets a clear financial target and makes the daunting task of saving both manageable and measurable.

In fact, by knowing how much you’ll likely need in the future, you can tailor your savings and investment strategies to meet your goals without overextending yourself financially or risking your child’s future by taking on unnecessary student loan debt.

So then, take the time to ask yourself: “What school would my child likely attend, how many years do we have to save for it, and what resources can we allocate?”

Start by researching the current costs associated with the colleges or education programs you are considering. You can do this by using online calculators or financial planning tools specifically designed for education savings to estimate the total amount you need to save while accounting for inflation and other rising costs.

Step #2: Select the Right Savings Vehicle

The next thing you’ll want to consider when it comes to funding the ideal amount of future college expenses without going into debt is to select the right vehicle for your savings. This is where choosing a 529 savings plan comes into play.

Now, you should know that you’re not limited to a 529 plan. In fact, you have options like an education trust, Coverdell or custodial accounts like UTMAs or UGMAs in which you can save for college expenses.

Either way, selecting the right savings vehicle is not just about putting money aside; it’s about choosing an approach that aligns with your financial situation, your goals, and your tax situation.

Ultimately, however, it’s about understanding and choosing a vehicle that’s ideal for you to ensure that every dollar saved works as hard as possible towards meeting your education funding goals.

So then, to this end, ask yourself, “What are my primary objectives for saving for my child’s education? Is it flexibility in the use of funds, tax savings, or maintaining control?”

Then, with your goals in mind, take the time to research and compare these options. That’s because by understanding the nuances of each option, like the tax advantages of 529 plans, the expansive eligibility of Coverdell accounts, or the flexible nature of UTMAs and educational trusts, you’ll be able to ensure that every dollar you save is working tirelessly towards your future funding goals.

Step #3: Get Started Immediately

Finally, if you want to avoid the regret of not being able to fund your child’s education without taking on debt, then you’ll likely want to get started sooner rather than later.

Certainly, the sooner you start putting money aside, the more you’ll likely benefit from the power of compounding.

In fact, each day you delay is potential growth lost that could have been contributed to your child’s education savings.

At the same time, by starting right now, you’ll also reduce the financial stress associated with setting aside enough money while giving yourself a longer time horizon to manage any market fluctuations or changes in educational plans that may come your way.

That’s why it’s crucial to ask yourself, “Can I start making regular, monthly contributions without significantly impacting my current financial lifestyle?

Now, you’d be surprised at how, the sooner you get started, the less of a burden saving for college can be.

That’s why, once you have your savings account in place, you’ll likely be best served by setting up automatic contributions from your bank account. That’s because even small amounts add up over time, and automatically saving removes the temptation to skip contributions.

Be Prepared, So Your Kids Can Be Spared

Either way, as I reflect on my own education journey, having been burdened with debt despite my academic success, I realize how different my story could have been had someone told me what I was getting myself into by taking on student loan debt.

So then, my wish for you first-gen parents out there is to not let the burden of student loans limit your child’s potential.

You know, you have the power to shape a future where your kids can pursue their dreams without the burden of debt.

So, go out and start now by setting clear learning goals, choosing the right savings vehicle, and getting started with that initial contribution.

Because if you don’t, if you delay just one more day, you could be setting your child up for more than a missed opportunity.

You could be fundamentally altering their future.

Indeed, without the foresight to avoid student loan debt, your child could face decades of financial strain.

They could become another statistic and face a burden that forces them to make life choices based on financial necessity rather than their passion or ambition.

They could be stuck settling for a job they don’t love or delaying major life milestones like buying a home or starting a family because they’ve got student loans to pay off.

But, it doesn’t have to be this way.

I mean, imagine a future where your and my kids can step into adulthood equipped, not encumbered.

A future where the decisions that you or I make today, like getting started with college savings now, lays down a path of opportunity, not obstacles.

So then, by choosing to prioritize funding their education without debt, we’re ultimately empowering our children to pursue careers they’re truly passionate about.

We’re enabling them to innovate, and to lead without the heavy burden of financial constraints.

And, in a way, we’re likely setting the stage to create a ripple effect of success that enriches our families, lifts up our community and takes us all one step closer to becoming the masters of our own financial independence journey.