How College Planning Tools Can Improve Financial Wellness

College planning tools make the price tag less intimidating

For many, the true monster hiding beneath the bed this fall is the whopping price tag of college education. Between bloated tuition costs, the burden of loan payments and the growth of inter-generational debt, college planning has become an essential element of financial wellness—especially for retirement savers. With the help of college planning tools, however, the Halloween season can be a little less scary.

October brings the start of college applications and painful financial-aid applications. Financial planning is top of mind for the households of both prospective and current students, making key college planning tools like scholarship search aid, budgeting calculators and educational materials valuable for participants. The data speaks for itself: a survey by Corporate Insight found that 72% of participants who use financial wellness programs rate accessibility to a college savings calculator to be “very important” or “extremely important.” John Hancock’s robust College Education Planning Center is a prime example of how firms can leverage tools, calculators and educational resources to support participants short-term and long-term savings goals.

Why college planning is essential for retirement saving

Over the past twenty years, the cost of tuition has drastically increased—rising 212% for public universities and 144% for private universities—making college planning a make-or-break element of financial planning and saving for retirement. Risings costs make financial aid—including deceptively ‘affordable loans’—a necessity in order for families to keep up.

In consequence, some borrowers are finding themselves trapped in a generational lynchpin of debt: guardians and children both trying to pay back student loans, but neither able to save for the future. The Wall Street Journal reports that borrowers above the age of 35 hold nearly two-thirds of the overall student debt, yet the number of borrowers for under and over 35 is roughly equal. Add in children’s reliance on their parents for financial support, and the result is a whirlpool of debt that reaches across generations.

Now, households must now prepare for federal loan payments to resume once more—and borrowers are feeling the squeeze. According to one borrower interviewed by the Associated Press, “in the next [few] months, I’m looking to see where I can scale back in my budget.” It’s not only luxuries, like vacations or dining, on the chopping block, but also car payments, paying down credit card debt, and keeping up with bills. As Americans ‘trim the fat’—or more aptly trim the protein—from their budget, research shows that retirement savings are no exception. To underscore this, a recent survey by Corebridge Financial found that 75% of federal student loan borrowers felt that their loan payments would impact their ability to save for retirement. As an individual interviewed by NBC put it bluntly:

“I’m 40 now and have no significant retirement savings… like most folks, I’m about $500 underwater every month when he bills are paid.”

Financial planning is no longer simply a matter of tucking away savings through regular contributions or savvy investments. Now, most Americans are caught in a treacherous tightrope walk as they try to balance increasingly expensive tuition, suffocating student debt and long-term retirement saving. This is where firms can dash to the rescue with college planning tools—and John Hancock answered the call.

John Hancock’s College Education Planning Center

John Hancock offers a robust College Education Planning Center that allows participants to tackle the “Goliath” of financial planning. Through the firm’s platform, participants can access an array of tools, calculators and search engines—including a scholarship search—to prepare for steep education costs. Participants can also use the platform to set and track unique savings goals, create and manage calendars to track key dates and receive personalized advice on how to achieve their savings goals. The inclusion of a virtual chatbot and task list banner go one step further in providing navigation support. With the variety of features available, the platform positions itself as a central hub to address almost every aspect of college planning.

One of the platform’s notable tools—the College Savings Estimator—offers an array of inputs which dynamically update to display a visualized projection of the participant’s savings goal. The calculator considers a variety of variables, including the potential inflation of tuition, and allows participants to add the costs for multiple prospective students into the estimation. For households with multiple children or who are anxious about long term planning, the calculator’s simple design, detailed inputs and clear recommendations—like a recommended monthly contribution to reach their goal—the College Savings Estimator will be a useful feature.

Notably, the firm goes a step beyond savings advice by including links to a diverse array of college resources within a centralized hub. Through the Resource Center tab, participants can find information on college admissions and test prep, guidance on finding the right university, financial aid, loan advice and more. For those anticipating, or who already have, student debt, the Planning Center also features a Student Loan Repayment Calculator.

While John Hancock excels with an impressive suite of college planning tools, it is not the only firm taking important steps to address the financial strain of college education. Read CI’s report on College Planning Tools to learn more about what competitors like Candidly, Fidelity and Enrich are doing to give their participants a much-needed financial wellness boost.

Armed with the right tools and resources, financial wellness participants can tackle college planning without sacrificing or sidelining their retirement savings. Going a step further, for households trapped in the pit of inter-generational debt, this kind of high-level, personalized support can be essential, balancing financial and emotional wellness with actionable advice for tackling the problem. College planning tools are more than mere fluff to pad a firm’s digital offerings, but rather an essential part of retirement planning.