How Much to Save for College?

[5 min read] Curious about how much money you should Save for College? Read this Qilo News article and discover the Perfect amount of Money to Save for College

How Much to Save for College?
Save for College Image Graduate holding Book

Student loan debt is one of the major financial issues of our time, and that’s because it can be crippling to a young person’s start on life.


Of course, the question becomes how does a student pay for college without loans? Most people know about scholarships and grants, but not all students can qualify for that kind of thing.


What about the rest of us?


Luckily for many students, higher education can be obtained without driving deeper into debt if you engage in thoughtful planning years ahead of time.


We’re going to talk about some of the things that high schoolers and pre-college students can do to save up for college as well as some things they can do while they are in school to make the most of what they have and even earn more.


We’ll review some of the pros and cons of each as well as discuss how idiosyncratic this situation can be for students and why blanket rules like “no loans ever” aren’t the best advice for all borrowers.


One note about the advice in this article is that it will talk from both the perspective of the parents of the student as well as the student herself.


The reason for this is that we want to accommodate both major schools of thought which are that an education is a parent’s responsibility versus the idea that such a burden should be carried entirely by students themselves.


When to Start


Probably one of the best questions to ask, and one you should be concerned about as soon as possible, is when to start saving for a college education.


Naturally, this assumes a lot of things, among them that your student wants to go to college, but more importantly, it assumes a specific college or destination in mind. We don’t recommend that because flexibility can be the key to winning in both the college admissions and cost game.


As a rough guide, the best time for the student and parent to sit down and think about college is the beginning of middle school. You can even visit some schools, talk about the difference between public and private, and what might be required for the student’s top choices.


Having this discussion now turns college into a goal that is to be worked towards. Your student isn’t working to save up for a car or something like that but rather is aiming towards a higher education.


Similarly, if you are a parent that wants to pay for your child’s education, you need to seriously evaluate your financial status at this point and really concentrate on retiring short-term debts as well as anything like a car payment or mortgage. Your goal is to be financially able to help if that is your desire.


You can’t do that with a bunch of debt yourself. In our suggestions, we are going to assume a partnership where possible or imply one when we can This is because a parent and student working together is much more effective at saving up for school than either one operating alone.


Education Savings Account (ESA) or Education IRA


A popular way for parents to save for a child’s education (and one with plenty of tax benefits) is an Education Savings Account, also known as an ESA, or an Education IRA. This sets aside money, sometimes in an investment account, for a future student’s use towards tuition and living expenses.


The power of regular contributions aside, the tax credits this generates are also a profound benefit for taxpayers and one that encourages them to continue investing. The only major downsides to this are the contribution limits as well as certain age limits and income limits. Most people qualify, however, and we encourage you to take advantage of this if you have the means. 


529 Plan


A 529 Plan is another option for parents that don’t qualify for the ESA or Education IRA. The only things we would be sure to look out for are the ease of transferability if the designated child decides to not go to college and the types of investments the fund chooses. Some funds change the investment makeup depending on the age of the child. You also will want to monitor things like fees associated with this account.


UTMA or UGMA (Uniform Transfer/Gift to Minors Act)


Uniform Transfer to Minors Gift Act is perhaps the single most flexible option for parents that not only want to help fund their child’s future education or even the purchase of a house. One major downside to this is, of course, once the child comes of age whatever is done with the money is up to that child’s decision and the second major downside is that it does not allow for a change in beneficiary once set.


What Students Should Do Before and During College


An amazing benefit of the college savings process for parents and students is that their relationship can not only become closer but each person can learn valuable financial life skills. Advice tends to take the perspective of placing the full burden of an education on one party or the other. The best path is a partnership and that means each side does their part.


Here are six ways that students can make sure that they are taking college planning seriously as well as save up some money or save money off of the full cost of an education.




We suggest that students start their research into potential scholarships in their sophomore or at the latest their junior year. Scholarships are a powerful way to defray the costs of school and are, in essence, free money.




Like scholarships, relevant grants require research and that is something that should begin as soon as possible. As with scholarships, balancing out the requirements of a grant can seem intimidating and that’s why we recommend research ahead of time.


The challenge that many students face, and that gives some who works ahead of time a serious advantage, is that they are discovering all of this at the last minute and in the heat of the moment. There’s no better way to stand out from the crowd than to have your application in early, polished, and without question that you qualify. 


Community College Credits


Did you know that students can take community college classes in their junior and senior years of high school and that, in many cases, these credits transfer to colleges?


A simple way to knock out some basic requirements and save some money at the same time, this is a proactive way to not only prepare for the greater expense of a university but also for the rigors of a college course.


Students need to make sure that the credits earned will transfer to their preferred institution, however, and should not proceed until they have confirmed that.


AP Classes


An alternative or complement to community college classes is to take AP classes in high school and then the AP exam which awards equivalent college credit at some schools. While not every school will accept certain community college credits, it is a fairly universal thing for schools to accept AP classes.


Side Job/Summer Job


There are many options for students to earn money on the side online or part-time after school. Of course, there’s the classic summer job as well. These activities not only build character and valuable life skills but also help students sack away money for school.


But, as with all of the advice on this list, you need to be financially savvy with this as well.


Why? Some schools might hold back on the amount of financial aid they give your student - preferring them to spend their own money instead.


One way to make sure this money still goes towards making school cheaper while also allowing you to get the full benefit of the free resources out there is to use a student’s savings towards something such as a cheap, affordable car, a secured credit card to help with expenses, or even a retirement account.


Why the last option?


In times of need, retirement accounts such as traditional and Roth IRAs can be used for educational expenses without penalty.


Savings Account


Throughout the process of working and making money, future students should have a savings or investing account into which they put their money for future needs. You should try to do as much as you can for yourself ahead of time because trust us, you’ll need more than you ever imagined.


While saving as much as you can is probably not the most nuanced advice, it is the most practical given how variable college costs can be between regions, private versus public, and the amount of college preparatory work the student has done prior.


Saving for college is a monumental task, but it is a hill that anyone can climb with enough planning and training. The key is to get the best education you can at the lowest price you can with as little debt as possible.