Saving now can pay off long after college.

Not only are children with a college savings account much more likely to attend college, but their career earning power can be much higher than that of a high school graduate.

  • A college graduate will earn, on average, up to 65 percent more than the typical high school graduate.1 Over 40 years, that difference can equal $1 million or more, according to the U.S. Census Bureau.

Here's how income by education breaks down in Idaho:

Average-Income-level_@1x.png

The chart represents average annual income by education level at career midpoint.

The real cost of borrowing vs. saving

The reality is, borrowing to pay for college significantly increases the long-term cost of a degree. Moreover, studies show that having heavy college debt frequently delays a graduate from buying a home or starting a family.2

Consider these two hypothetical scenarios:

Scenario 1: Terry's parents start investing $100 a month into a 529 plan account right after Terry's birth. In 18 years (assuming a 5% annual rate of return), they could potentially save more than $35,000.3

Scenario 2: Terry has to borrow $35,000 to attend college. Based on a private student loan rate of 7%, Terry could be faced with a monthly payment of $406 for 10 years (or $48,720).4

Save-Borrow-Chart_@1x.png

How do many families pay for higher education?

Most will use a combination of financial aid; money they've already saved for other needs, like retirement; and loans.5

The secret is to start saving right now. Regular investments can potentially add up to a college nest egg over time. One way is to put your 529 plan account on autopilot with a recurring contribution (an Automatic Investment Plan or (AIP), or payroll direct deposit through your employer (where available)).3

1 College Board: Trends in College Pricing, 2013

2 "How Today's Student Loan Debt Is Failing Future Generations." Forbes / Education, July 30, 2014.

3 A plan of regular investment cannot ensure a profit or protect against a loss in a declining market.

4 This hypothetical example is for illustrative purposes only and assumes no withdrawals made during the period shown. It does not represent an actual investment in any particular 529 plan and does not reflect the effect of fees and expenses. Your actual investment return may be higher or lower than that shown. The loan repayment terms are also hypothetical.

5 How America Pays for College, Sallie Mae's National Study of College Students and Parents, 2014

Ascensus Broker Dealer Services is the distributor of IDeal - Idaho College Savings Program. Learn more about Ascensus Broker Dealer Services, Inc. on FINRA's BrokerCheck.

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Mr. Thiros is a registered representative of Ascensus Broker Dealer Services Inc., 877-529-2980, 95 Wells Ave, Newton MA (member FINRA/SIPC) and is not employed by the State of Idaho.

For more information about IDeal - Idaho College Savings Program ("IDeal"), call 866-433-2533 or click here to obtain a Disclosure Statement. The Disclosure Statement discusses investment objectives, risks, charges, expenses, and other important information. Because investing in IDeal is an important decision for you and your family, you should read and consider the Disclosure Statement carefully before investing. Ascensus Broker Dealer Services, Inc. ("ABD") is Distributor of IDeal.

Please Note: Before investing in any 529 plan, you should consider whether your or the beneficiary's home state offers a 529 plan that provides its taxpayers with state tax or other benefits that are only available through investment in the home state's 529 plan. You should consult your financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state's 529 college savings plan(s), or any other 529 plan, to learn more about those plans' features, benefits, and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

IDeal is administered by the Idaho College Savings Program Board ("Board"). ABD, the program manager, and its affiliates, have overall responsibility for the day-to-day operations, including investment advisory, recordkeeping and administrative services, and marketing. The Vanguard Group, Inc. ("Vanguard") serves as Investment Manager for IDeal. Sallie Mae Bank serves as the Savings Portfolio Manager for IDeal. IDeal's Portfolios invest in either: (i) mutual funds offered or managed by Vanguard; or (ii) an FDIC-insured omnibus savings account held in trust by the Board at Sallie Mae Bank. Except for the Savings Portfolio, investments in IDeal are not insured by the FDIC. Units of the Portfolios are municipal securities and the value of units will vary with market conditions.

Investment returns will vary depending upon the performance of the Portfolios you choose. Except to the extent of FDIC insurance available for the Savings Portfolio, you could lose all or a portion of your money by investing in IDeal, depending on market conditions. Account Owners assume all investment risks as well as responsibility for any federal and state tax consequences.

Not FDIC-Insured (except for the Savings Portfolio). No Bank, State or Federal Guarantee. May lose value.