By Cherri Gregg and Oren Liebermann
PHILADELPHIA (CBS) – Twenty-one-month-old Justin Morano is not worried about the cost of college yet, but his grandmother certainly is.
“It’s obscene. It’s absolutely obscene,” said Moira Morano. “For our generation, it was so much easier.”
The soaring cost of higher education has it made it crucial for parents to plan for the price of a four year degree, already almost $120,000 for a private university. And May 29th is 529 Day, a national movement to raise awareness about saving for college education. The Commonwealth has set up a few incentives to get parents started.
“What we see is a lot of people getting overly intimidated and saying ‘we’ll figure it out later.’ That’s the opposite of the approach we want.”
State Treasurer Rob McCord says the purpose of 529 Day is to remind parents that as their children grow, so does the cost of higher education. He says 529 savings plans are an option that helps parents savings keep up with inflation while getting state and federal tax deductions.
“You can cut the cost of education more than in half by saving and preparing, versus borrowing. We expect future interest rates to be much higher, so people who have kids who aren’t going to school until 10 years from now face much, much higher student debt rates.”
The average college student graduates with more than $25,000 of debt according to the Institute for College Access and Success. In Pennsylvania, the problem is even worse. Seventy percent of students graduate with debt, and the average amount is nearly $29,000.
“It’s more expensive than your home or anything else in your home, and it’s going up faster,” said Kathleen Higgins, the mother of a nine-year-old. “There’s no stopping it.”
Parents like Ivy Ottih say they will sign up for a 529 plan to ease the burden of paying for college.
“All you can do as a parent is have a plan B if they don’t get scholarships or don’t get any other help,” said Ottih.
McCord says parents can sign up for a 529 College Savings account for free through May 31st and could win one of 10 accounts with $529 to get started. For more info, go to PA529.com