College Savings Takes a Hit in Weakening Chicago Economy
A savings account may be a luxury for many people trying to save money for their future, but for many Chicago families, saving money isn't as feasible as it once was.
With the economy struggling to recover and people dealing with job loss, high-interest loans and credit cards that have kept them buried in debt, filing for Chapter 7 bankruptcy in Chicago may be a sound option.
Filing for bankruptcy immediately stops creditors from calling and attempting to garnish wages and otherwise making life difficult. So, if a consumer is drowning in debt brought on by job loss, mounting medical bills, or predatory lending practices, consulting with an experienced Chicago Bankruptcy Attorney would be a smart move.
According to a recent survey, more parents are saving for their children's college education, but the rising costs of higher education, coupled with additional pressure from the poor economy, are hurting the future value of those savings.
The survey, conducted by Fidelity Investments, found that 67 percent of parents have started putting money away for tuition costs. That's a 9 percent jump from a 2007 survey, the first year the survey was done.
But more than half of parents who were surveyed are still paying off their own student loans and half are also paying an average of $576 per month for preschool or daycare. About 40 percent are paying for those obligations along with a college fund for their kids, too. That has increased 27 percent from five years ago.
Because of increasing college costs and people less able to save money, Fidelity believes the average American family will be able to pay for about 16 percent of college costs, based on savings. In the last five years, that number has dropped about 8 percent, while college costs have jumped nearly 26 percent.
The percentage of parents who believe it is their responsibility to pay for their kids' college has increased, and many are taking extra jobs to pay for the added expense. Some parents are asking their teens to take part-time jobs, live at home and commute, and consider public universities over private schools.
What this study shows is how the economy has affected the average household. Savings are a great thing to have, but many people are forced to decide between putting away money for junior's college fund or paying off the expensive purchase that now costs twice what the sticker price was because of high interest rates levied by credit card companies.
Saving money can sometimes take a back seat when bills are mounting and a family is getting behind making payments. Family members must make difficult choices, and for those who are absolutely devastated by debt, saving money is just not going to happen. For those people, bankruptcy could work.
Filing for bankruptcy halts all debt collection practices, including foreclosure, wage garnishment and collectors calling. It allows for consumers who have overwhelming debt to get a fresh start with their finances after the IOUs disappear.
If you need to speak to a Chicago bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis. Call 800-440-7235.
More Blog Entries:
Parents falling behind on saving for kids' college, by Jessica Mintz, MSNBC.com