When Your Student Is Ready for College, Will You Be Ready, Too?

Higher education can be expensive, and paying for it seems challenging. But you don’t have to do it alone. Let us help you plan and save. A State Farm® registered agent can explain these options and then help you tailor your plan for the future.

529 Savings Plan

For most colleges nationwide

Coverdell Education Savings Account (ESA)

Every Dollar You Invest Is a Dollar Your Student Won’t Have to Repay

The average student in the Class of 2016 had $37,172 in student loan debt[1]. The monthly payment on that could be $432/month … for ten years. That’s money a graduate might not be able to put toward a new home, beginning a business or starting a family.

It’s Never Too Early to Start Saving for College

If you begin now and make regular contributions into a savings plan from State Farm®, even modest amounts can grow significantly over time.

Here's how time and tax-deferred earning can work together to help your money grow: Bar graph illustrating how time and tax-deferred earnings can work together to help your money grow. Graph is based on $150 monthly contributions into a college savings account that earns 7% that is compounded until the child is 18 years old. For a newborn with total contributions of $32,400 will earn $32,626 over time and have a total of $65,026 in the college savings account by the time the child is 18. For a child in kindergarten with total contributions of $23,400 will earn $14,841 over time and have a total of $38,241 by the time the child is 18. For a child in 3rd grade with total contributions of $16,200 will earn $6,419 over time and have a total of $22,619 by the time the child is 18. For a child in 6th grade with total contributions of $10,800 will earn $2,656 over time and have a total of $13,455 by the time the child is 18. For a child in 9th grade with total contributions of $5,400 will earn $625 over time and have a total of $6,025. Hypothetical Illustration; This chart illustrates an investment of $150/month (on the first day of the month) into a college savings account that earns 7% per year, compounded monthly until the child is 18 years old. This hypothetical is for illustrative purposes only.  it does not reflect an actual investment in any particular college savings plan or in the State Farm 529 Plan.

What will you need to achieve your education savings goal?

Use this calculator while you’re saving for college.


Education Opens Doors to Opportunity

Over a lifetime, students with a Bachelor’s Degree earn $1 million more than those with a high school degree.[3]


Annual Median Earnings of Full-Time Year-Round Workers Ages 25 and Older, by Education Level[3].

Bar graph illustrates annual median earnings of full-time, year round workers, ages 25 and older, by education level. Professional education levels earn $110,900 a year, which is 201% more than those with only a high school degree. Doctoral education levels earn $100,100 a year. People with master’s degrees earn $75,200 a year. People with bachelor’s degrees earn $61,400 a year, which is 67% more than those with only a high school degree. Associates degrees earn $46,000 while people with some college but no degree earn $41,700. High school diploma workers earn $36,800 and less than a high school diploma earns $27,200 a year.

 

You Don’t Have to Pay the High Cost of Higher Education on Your Own

It’s often helpful to encourage friends and family to contribute to education savings. Grandparents, aunts and uncles, and friends may all welcome the opportunity to help your student. After all, education is the gift that lasts a lifetime. Long after toys break or clothes are outgrown, a deposit into an education savings plan will still be appreciated.


Today, Parents Often Combine Their Own Money with Loans, Gifts, Grants and Scholarships

Bar graph illustrates how today, parents often combine their own money with loans, gifts, grants and scholarships. 41% of college is paid by out of pocket costs which include 29% of the parents income and savings and 12% of the student income and savings. 20% of college is paid by principal and interest repaid including 7% parent borrowing and 13% student borrowing. 39% of college is paid by no repayment options, such as 34% from grants and scholarships and 5% from relatives and friends. Source: How America Pays for College 2016 SallieMae® and Iposs Public Affairs™

  • [1] Forbes.com, “Student Loan Debt in 2017: A $1.3 Trillion Crisis.” Zack Friedman. February 21, 2017.

  • [3]Education Pays 2016. Trends in Higher Education Series. The Benefits of Higher Education for Individuals and Society. Jennifer Ma. Matea Pender and Meredith Welch: College Board.

Risk Disclosures

The State Farm 529 Savings Plan (the "Plan"), is sponsored by the State of Nebraska and administered by the Nebraska State Treasurer. The State Farm 529 Savings Plan offers a series of investment options portfolios within the Nebraska Educational Savings Plan Trust (which) offers other investment portfolios not affiliated with the State Farm 529 Savings Plan. The State Farm 529 Savings Plan is intended to operate as a qualified tuition program to be used only to save for qualified higher education expenses, pursuant to Section 529 of the U.S. Internal Revenue Code.

An investor should consider the Plan’s investment objectives, risks, charges and expenses before investing. The Program Disclosure Statement at statefarm.com® which contains more information, should be read carefully before investing.

Investors should consider before investing whether their or their beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program and should consult their tax advisor, attorney and/or other advisor regarding their specific legal, investment or tax situation.

Investing involves risk, including potential for loss.

State Farm Bank, F.S.B., Bloomington, Illinois ("Bank"), is a Member FDIC and Equal Housing Lender. NMLS ID 139716. The other products offered by affiliate companies of State Farm Bank are not FDIC insured, not a State Farm Bank obligation or guaranteed by State Farm Bank, and may be subject to investment risk, including possible loss of principal invested. The Bank encourages any interested individual(s) to submit an application for any product(s) offered by the Bank. We also encourage you to obtain information regarding the Bank's underwriting standards for each type of credit or service offered by visiting statefarm.com® or by contacting the Bank at 877-SF4-BANK (877-734-2265). If you are deaf, hard of hearing, or do not use your voice to communicate, you may contact us via 711 or other relay services. To apply for a Bank product, you may also see your participating State Farm Agent.

AP2018/07/0884