State Treasurer of Iowa

Save More Now and Pay Less For College

The cost of borrowing money for college may add up to more than you think. According to the Institute of College Access & Success, 69% of all students graduating from four-year colleges in 2014 had student loan debt.

To understand how expensive borrowing for college can be, consider the two scenarios in the graphic below. A family that saves $23,400 ($25 a week) over 18 years could have $42,000 to help with college expenses. Another family that borrows $42,000 could end up repaying almost $60,000.** Although you may not be able to save the entire amount needed to pay for college, every dollar you do save will be less money that you’ll have to borrow (and pay back with interest).
 
*If withdrawals are not qualified, the deductions must be added back to Iowa taxable income. Adjusted annually for inflation.
If you are not an Iowa taxpayer, consider before investing whether you or your 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.
**Assumes a 6% earnings rate for the savings and a 7% interest rate and 10-year repayment period for the loan.
 
© 2024 State Treasurer of Iowa. All rights reserved.