Feeling Flush, More Parents Open Their Wallets for College Spending
As lingering financial fears from the recession fade, more parents are willing and able to open their wallets to pay for their children’s educations.
Parents have become the top source of college funding for the first time since 2010. According to a new report from private student loan lender Sallie Mae’s, parental income and savings covered 32 percent of college costs in the academic year 2014-15, while scholarships and grants covered 30 percent.
Families spent an average of $24,164 on college this year, a 16 percent rise in spending from the previous year and the largest increase since 2009-10. The money spent covers costs of tuition, books, and living expenses.
Related: Average Family Has Saved Enough to Send One Kid to College for Half a Year
The report details how fewer parents fear the worst when it comes to the risks associated with college. Fewer parents are worried that their child won’t find a job after graduation, that their income will decline because of layoffs, and that there will be an increase in student loan rates. As confidence has increased, fewer families are using cost-saving techniques, such as having students live at home.
Another factor contributing to the willingness of parents to spend on education is the improving stock market. The average size of a 529 account, the popular college savings investment plan, continues to grow after the recession caused a downturn, hitting a balance of $20,474 as of December 1, 2014. That figure tumbled to $10,690 at the end of 2008, according to data from the College Savings Plan Network.
Although parents may be feeling better about paying for college, the basic trend of increasing prices continues, and loans are still a big part of the funding picture. Between 2001 and 2012, average undergraduate tuition almost doubled, causing an average real rate increase of 3.5 percent each year. Nearly 71 percent of college graduates left school with student loan debt this year, up from 54 percent 20 years prior. The average debt was $35,000 in 2015, an increase of 34 percent from 2010, student loan-tracker Edvisors has found.
Medical ID Theft is a Way Bigger Problem Than You Think
Forget Target and Home Depot. You may be risking identity theft every time you visit the doctor’s office.
Medical ID theft, in which thieves steal your Social Security number and health insurance info in order to fraudulently obtain medical services or treatment, is skyrocketing.
More than 90 percent of healthcare organizations have had a data breach, and 40 percent had more than five data breaches in the past two years, according to a report released last month by ID Experts. Attacks by criminal organizations are up 125 percent over the past five years. Medical identities are worth far more on the black market than financial identities.
The study estimates that data breaches may have cost the industry $6 billion in the last two years. The scariest stat for consumers: Half of organizations surveyed have little or no confidence in their ability to detect all patient data loss or theft.
Related: Now You Could Lost Your Medical Identity, Too
Victims of medical ID theft spend thousands to restore their credit and correct inaccuracies in their medical records, and unlike banks and credit card issuers, most healthcare organizations offer no protection services for victims.
In addition to the financial toll, there are health risks to victims of medical ID theft. If someone steals your identity and receives treatment that gets added to your medical records, doctors may have incorrect information regarding your health history and allergies.
It’s difficult to prevent medical ID theft, but monitoring your credit and closely reading your healthcare bill and explanation of benefits notices can help you catch it early.
Can a Few Chocolate Euros Stop a Grexit?
German Finance Minister Wolfgang Schaeuble has clashed repeatedly with Yanis Varoufakis over Greece's debt and economic reforms since the leftist Syriza party took power in January, pledging to end austerity and renegotiate the bailout terms.
In an interview with the children's television program "Logo" on German broadcaster ZDF last week, a girl reporter gave Schaeuble a supportive handful of the chocolate coins.
"I'll take a few for my Greek colleague, he also needs strong nerves," Schaeuble replied.
Greece hopes to secure a cash-for-reforms deal with its lenders this week. But after four months of tortuous negotiations no breakthrough is in sight. Without a deal Athens risks default or bankruptcy in weeks.
A Made-Up Holiday That Could Help Your Kids Go to College
Marketers are great at making up holidays—and who doesn’t love having an excuse to eat donuts on National Donut Day or pizza on National Pizza Day?
Most of these special days, however, tend to take a toll on both our wallets and our waistlines. Today may be an exception: The personal finance and college saving industries have dubbed today 529 Day (Get it? 5/29), a day to celebrate saving for college via tax-favored 529 plans.
Americans could benefit from any impetus to save more for higher education. The average American family that’s saving for college put away about $2,600 last year and has a total of just over $10,000 socked away for education, according to Sallie Mae’s annual How America Saves for College report. That’s the lowest amount since the survey began in 2009 — or about enough to send one kid to college for one semester at today’s prices.
Related: Top-rated 529 Plans Probably Are Not For You
Many states are “celebrating” the day with everything from waived enrollment fees to discounted admission to local baseball games. (Each plan is sponsored by a state but run by financial firms.) Check out this interactive map to find out if your state is offering any incentives today.
Contributions to a 529 plan are made after federal taxes, but the money grows tax-free as long as the proceeds are used for education costs. Some states also offer tax breaks on contributions.
The average cost of attending public college this year is $19,000. For private college it’s $33,000, according to The College Board. So there’s no time like today to start saving.
The 5 Funniest 2015 Commencement Speakers
At commencement ceremonies, every speaker gets to be a comedian, even comedians. The competition was tough, but at least two of the best lines compiled by The Washington Post, came from politicians.
“I stand here humbled, gracious and completely naked under this robe.”
--Maya Rudolph, Tulane University
“The UVA community has some experience with being defined by outsiders. It has been said that a rolling stone gathers no moss. I would add that sometimes a rolling stone also gathers no verifiable facts or even the tiniest morsels of journalistic integrity.”
--Ed Helms, University of Virginia
“Tisch graduates, you made it. And you’re f----ed. The graduates from the College of Nursing, they all have jobs. The graduates from the College of Dentistry, fully employed. The Leonard N. Stern School of Business graduates, they’re covered. The School of Medicine graduates, each one will get a job. The proud graduates of the NYU School of Law, they’re covered. And if they’re not, who cares? They’re lawyers.”
--Robert DeNiro, Tisch School of the Arts, New York University
…[Yale was] one touchdown away from beating Harvard this year for the first time since 2006. So close to something you’ve wanted for eight years. I can only imagine how you feel. I can only imagine.”
--Vice President Joe Biden, Yale University
Those of you who are graduating this afternoon with high honors, awards and distinction, I say, ‘Well done.’ And as I like to tell the C students, ‘You, too, can be president.’”
--former President George W. Bush, Southern Methodist University
Denny Hastert: Uh, About That $500,000 Statue…
Illinois state lawmakers are hitting the breaks on a proposal to spend half a million dollars for a statue honoring former U.S. House Speaker Dennis Hastert after the Justice Department indicted the Illinois Republican on multiple charges Thursday.
About a month before the DOJ announced the indictment against Hastert,
Illinois House Speaker Michael Madigan introduced a bill to allocate $500,000 from the Illinois Development Fund for a statue of Hastert, who represented Illinois’ 14th Congressional for 20 years after serving as a state representative.
Related: Lying, Cheating, Stealing: How Corrupt is America?
However, Madigan’s spokesperson, Steve Brown, said Hastert contacted lawmakers asked that they defer the proposal because of the state’s financial condition. Illinois currently is running a $9 billion deficit. Still, the bill, which passed through a house committee, was placed on the calendar for a third reading on May 18.
In the indictment released Thursday evening, federal investigators allege that Hastert paid $3.5 million in hush money to “cover up misconduct.” The money allegedly went to someone in Yorkville, Ill., where he previously coached high school wrestling. The seven-page indictment also accused him of lying to the FBI.
Following the announcement, Hastert reportedly resigned from his current position at Washington, D.C., law firm Dickstein Shapiro, as well as a board member at CME Group, according to Reuters.