McRae: Tips on saving for college

By State Treasurer David McRae

September is College Savings Month. While I’ve previously written about Mississippi’s two college savings plans (MACS, which allows families to open a savings account for as little as $25, and MPACT, which allows families to prepay college tuition to hold today’s rates ), I wanted to learn more about why these programs provide so many benefits to Mississippi residents.

With tuition rising faster than inflation, it’s important to start saving now. According to the College Board, the average tuition and fees for a full-time student at a state four-year public university is $10,740 for 2021-22, up from $5,720 in 2001-02. Private, four-year colleges cost even more—an average of $38,070 for tuition and fees, up from $26,380 two decades ago.

While it’s never too late to start preparing to pay for college for yourself or loved ones, the sooner you start, the more time you have to grow your savings through contributions and interest earned over time. Why? The answer is simple: compound interest.

Albert Einstein once called compound interest the “eighth wonder of the world” and said: “Whoever understands it deserves it; if you don’t, you pay for it.” Compound interest is when you add the interest you earn back to your capital balance, which then earns you even more interest and increases your returns. In other words, with compound interest, you don’t just make money on your initial contributions. Your interest also deserves interest!

So how do you start taking advantage of this compound interest opportunity? First, sign up for a MACS plan. Then make your contributions to the account automatically every month. And if you want to see that growth really add up, enlist your friends and family to contribute too!

Besides harnessing the power of compound interest, there are other ways to make college more affordable. Here are a few tips.

First, whenever possible, students should take advantage of opportunities to enroll in Advanced Placement (AP) courses for college credit. You may also consider attending one of Mississippi’s excellent community colleges before transferring to a four-year university. Others might consider summer classes at nearby community colleges after high school and transfer the hours to take a few required courses at a lower rate.

Scholarships are another great way to reduce the cost of college. Some are needs-based while others are performance-based. There are great resources online to help with finding scholarships, and most schools have lists of available scholarships that you can browse during the application process.

All students should also complete the Free Application for Government Financial Aid (FAFSA) to find out what types of government financial assistance might be available based on each student’s needs criteria.

Finally, many universities now offer programs to earn some four-year degrees in three years by taking additional hours each semester and during the summer semesters. For students who wish to attend graduate school, many colleges offer combined degrees to earn bachelor’s and master’s degrees, such as an MBA or law degree, in a compact schedule. These accelerated programs are also a great option for saving time and money from the overall college cost.

Our team at your Treasury will be happy to answer any questions and help you sign up for a college savings plan. Please call us at (601) 359-5255 or visit

Mississippi State Treasurer David McRae is the 55th Treasurer of the State of Mississippi. In this capacity, he helps manage state cash flow, oversees College Savings Mississippi and has returned more than $50 million in unclaimed funds to Mississippi. For more information, see

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