There are many reasons that parents put off saving for their child’s college education- but not many good ones. The decision to delay – or worse, not to prepare at all – is often driven by one or more myths or misconceptions about preparing for college costs.
These myths stem from concerns about hefty college costs, including the belief that tuition bills will be insurmountable, a lack of knowledge about the financial aid process, and a misunderstanding of the impact that college savings—of any amount—can have on a family’s out-of-pocket costs when funding a college education.
You Can Make a Difference
However, once you let clients know the facts, their perceptions about the true cost of college and their ability to afford it will likely improve. Starting early, saving often, and the counsel of a financial advisor can make college affordable for every family.
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Investments in 529 college savings plans are neither FDIC insured nor guaranteed and may lose some value. Some states offer favorable tax treatment to their residents only if they invest in the state’s own plan. Investors should consider before investing whether their or their designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program and should consult their tax advisor.