The Gift that Keeps on Giving

The holiday season is approaching, and with it, the busiest time of the year for shoppers as they search for the perfect gifts for their loved ones. But instead of purchasing the latest toy or electronic gadget for your children or grandchildren, what about giving them the gift of a more secure future? Roger Michaud, senior vice president and director of sales for Franklin Templeton’s 529 College Savings Plan, discusses how crowdfunding can help finance a college education—a gift that can keep giving for a lifetime.

Recently, I was struck by two very different articles—one about holiday gift-giving and the other about student debt. However, as I read them, I realized how intertwined they really are. Let me explain. Each holiday season, I find myself researching “best gift ideas for…” and come up with the same old lists. I even try different ways to search: “non-toy gifts,” “meaningful gifts” or “best-uncle-ever gifts.”

This year, I happened upon a study from the Journal of Infant Behavior and Development1 that found toddlers with fewer toys were more creative and focused. Even those “educational” toys?

That got me thinking about 529 plans and how they are a unique, meaningful gift that will eventually contribute to my family’s learning. I also started thinking about the rise in student debt and how helping save for education could help my nieces avoid a large amount of debt later.

Even if you don’t have children, you probably have already heard the staggering statistics about student debt in this country. As of the second quarter of 2018, there was more than $1.5 trillion in student loan debt outstanding, triple that of 2001.2 Various estimates show the average student loan is now more than $30,000 at graduation—quite an amount to face as one starts his or her career.

Many individuals still saddled with debt years after graduation are putting off events like getting married, buying a home or having children of their own because of it.

Despite this mounting debt burden, according to the College Savings Foundation’s 12th Annual State of College Savings Survey, more than half (57%) of parents surveyed plan to borrow to pay for their children’s college, with 62% of them borrowing primarily through education loans, and 18% through credit cards or a credit line cash advance.3