Avoiding Student Loans, One Step at a Time


Changing how Idahoans approach college costs

Story Nicole Bare Kinney

Idaho’s college tuitions are a frequent topic of conversation in the community, given that only half of students continue their education beyond high school. Following the Great Recession and rising tuition costs, those who do continue on routinely fund their education with student loans.

Research shows that high loan balances can stall opportunities for those students after graduation. Additionally, it has been found that people who graduate with student loans are less likely to believe the benefits of higher education outweigh the costs.

On the positive side, a shift is taking place in local culture, as evidenced by a steady increase in families’ use of the state’s IDeal — Idaho 529 College Savings Program — to save for the costs of higher education. Families like Boise’s Susan Miller use its investments and tax benefits to make hard-earned dollars stretch a bit further.

When her children were born, Miller knew that if she wanted to help them finance college, she needed to start immediately. “We don’t make enough to pay out-of-pocket, but we make too much to qualify for aid,” she explained. Susan and her husband started saving $25 a month — plus the occasional bonus —for each of their two children in an IDeal Idaho 529 College Savings account. When grandparents would give the children money for birthdays or Christmas, Susan made sure a portion of that money went into the IDeal accounts, too.

By the time her son Keegan started college, they’d managed to amass a surprising sum for him. “It only covers a portion of each semester, but it’s one less check that I have to figure out where to get the money,” said Susan.

Keegan is a sophomore in college, studying outdoor education. Miller’s daughter Caeley is a freshman in high school. With more time to save for Caeley’s college education, Susan recently raised her IDeal account contribution to $30.

“Susan Miller’s family is exactly the type of family that IDeal was created to help,” said Christine Stoll, Executive Director of IDeal—Idaho 529 College Savings Program. Stoll saves for her own daughters with IDeal. “By starting early, it’s possible to save a little at a time to possibly reduce their students’ dependence on loans. It can potentially add up over time.”

Families who use IDeal to save for higher education highlight three key reasons for doing so. First, contributions to IDeal are deductible from Idaho’s state income tax, up to $6,000 for single filers and up to $12,000 for those married filing jointly. Second, growth on their investments takes place tax-deferred, and if the money is spent on qualified education expenses, the growth is never taxed. Finally, funds saved through IDeal can be used at any eligible accredited institution in the United States, on expenses ranging from tuition and books to housing, meal plans, and technology. Savers can open an IDeal account in 15 minutes, with as little as $25.

Local savers are already seeing the benefits of their choice to save ahead and help their children avoid loans. Julie Robinson, another saver from Boise, saved enough over the years to pay for four years of expenses at the University of Idaho for her son Scott. “When you have a baby in the crib, that’s when you need to decide, ‘Is education important?’” said Robinson. “My answer is, ‘absolutely.’”

“Scott’s friends are all terrified of their student loans,” Robinson added, noting that she advised one of her son’s friends to quit a job that wasn’t advancing his career in the direction he wanted to go. The young man replied that he couldn’t quit due to his student loans. Robinson felt it was a shame. “You can’t pursue your dream [because of the loans], and yet the whole reason you went to college was to pursue your dream,” she said.

After four-and-a-half years of schooling, Scott graduated with a degree in accounting from the University of Idaho. With no looming student loan bills, Scott waited for a job he liked, in a city he loves, rather than taking the first job that came his way.

For more information: idsaves.org