Don’t give up on 529 accounts yet!

The economy just doesn’t seem to be improving. The current financial crisis is affecting everyone in some way, shape or form. But we read an article based off of a recent study by the Project on Student Debt that we certainly hope doesn’t become a trend in the 529 category. A public policy group that tracks student aid found that more college students may have to borrow increasing amounts of money to finance their higher education as market turmoil erodes savings accounts.

Truthfully, this finding doesn’t surprise us. As a savings account dwindles down amidst the tough economic times, students will be forced to turn to alternative options to finance college tuition, right? Well-maybe not! The article points out that the average undergraduate from the class of 2007 carries an average debt of $20,098. That’s not a number to scoff at. It takes a long time to pay off college loans! But the best way to “pay off” a college loan, is to take action today and avoid it altogether.

Jason Olim, chief executive officer of freshmanfund.com, on online college savings registry based out of New York, said the best way to reduce the college debt burden is to continue putting money away as much as possible, even in a tough economic environment! We agree, 100%.

Don’t let the current downtrodden economy scare you into having your child pay a substantially higher amount for college when programs like College Illinois! let you prepay the cost of college tuition at today’s prices. Flash-forward 18 years to your student preparing to move into the dorms for the first time, knowing that during the financial crisis of 2008, you took the necessary action to thwart the rising cost of college tuition by purchasing a contract from a 529 prepaid. That will be a MUCH better feeling than paying off a loan for years to come!