The road to college takes planning, diligence and late nights. On top of all the hard work just to be accepted, college tuition is rising – U.S. student loan debt has passed the $1 trillion mark and is the single largest source of unsecured debt. Despite this fact, fewer families are saving for college, and those who are saving are saving less. According to Sallie Mae’s How America Saves for College report, only half of families are saving, and only one third have a plan.
Aside from loans and scholarships, other possibilities do exist for families with college-minded students. One such option is Upromise by Sallie Mae, a cash-back college savings program through which members have saved nearly $750 million since 2001. Whether you are saving for a child’s college education, paying for a child now in school, or repaying student loans, Upromise enables you to earn cash back for college through everyday purchases.
Free to join and easy to use, Upromise members can earn cash back for college of 5 percent or more at hundreds of major online retailers, such as Target.com, Staples.com and OldNavy.com. Members can double that to 10 percent or more cash-back with the Upromise Mastercard and can also earn by dining out, booking travel and buying gas.
Start saving for college early with baby steps and don’t be intimated by the cost. Consider using a 529 college savings plan and be sure to supplement savings with Upromise. And friends and relatives can use Upromise to save for any beneficiary they choose.
Upromise by Sallie Mae offers these top five tips for savvy college savings:
- Get children invested in their savings and future. Encourage school-aged children to save money for their own education. Whether from a weekly allowance, baby-sitting or a summer job, each contribution can add up over time and serve as a reminder of the goal to attend college. Consider matching kids’ contributions to further encourage their savings.
- Use a dedicated college savings account to save. 529 college savings plans are a tax-advantaged way to save for college. Contributions grow tax-deferred and can be withdrawn tax-free when used to pay for tuition, room and board, books, and fees.
- Earn cash for college. Sallie Mae’s Upromise can bolster savings with cash back for college when you make eligible purchases from hundreds of participating companies. Joining Upromise is free and earnings can be invested in a tax-deferred 529 plan, deposited into a Sallie Mae High-Yield Savings Account, used to help pay down an eligible Sallie Mae college loan or you can request a check. Since 2001, Upromise members have earned nearly $750 million toward college.
- Check your state for tax incentives for college. Many states provide tax incentives for contributions into 529 plans. Before you choose a plan, consider whether your or your beneficiary’s home state offers any state tax or other benefits that are available for investments in such state’s 529 plans.
- Put your savings on cruise control. Studies consistently show that savers who set up an automated savings plan are more likely to accomplish their savings goals. Automatic savings plans can start with as little as $25 a month.
This blog was provided by Erin Condon, vice president Upromise by Sallie Mae. Erin was a guest on College Smart Radio “Tackling the Runaway Costs of College” on May 18th, 2013. Listen to this broadcast on YouTube here.