The Earlier, The Better: How NYC Parents Can Help Their Kids Avoid Student Loan Debt

April 13, 2026

Student loan debt in the United States has surpassed $1.84 trillion, with 44 million Americans carrying federal student loan debt and the average borrower owing nearly $40,000.¹ For many graduates, that burden shapes the jobs they can take, the homes they can buy, and the life they can build for years after graduation.

The good news: a lot of that debt doesn't have to be inevitable. Whether your child is in diapers or starting high school, there are concrete steps you can take right now to reduce how much debt they'll carry later.

NYC residents: Through a partnership with the New York City government, NYC residents have free access to Summer's platform. Read on to learn how these tools can help your family plan ahead and avoid student debt, or check out the platform here.

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When They're Little: Open a 529 Plan

The single most impactful thing parents of young children can do is open a 529 college savings plan. These state-sponsored, tax-advantaged accounts let contributions grow tax-deferred, and withdrawals used for qualified education expenses, including tuition, fees, books, and room and board, are tax-free. Many states add their own deductions for contributions on top of that.

Starting early matters. A tax-advantaged account seeded with an initial contribution and regular monthly deposits can accumulate tens of thousands of dollars more over 18 years than a standard taxable account.

Recent changes under the SECURE 2.0 Act have made 529 plans more flexible. Unused funds can now roll into a Roth IRA for the beneficiary (up to $35,000 lifetime). Additionally, under the FAFSA, distributions from grandparent-owned 529 plans are no longer treated the way they were under the old formula, which can reduce prior aid impact for many families.²

529 plan rules and tax benefits vary by state. You may qualify for additional deductions. Compare your options to find the best fit for your family.

Through Summer: Find and compare 529 plans across all states, including any in-state tax benefits available where you live.

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When They're in Middle or High School: Estimate the Real Cost of College

Once your child is in middle or early high school, it's time to get more strategic about what college will actually cost. Private nonprofit four-year colleges now average $45,000 per year in tuition and fees, and while public in-state schools are considerably more affordable at around $11,950 per year, those costs are rising.³

What many families don't realize until it's too late is that sticker prices are rarely what families actually pay. The average tuition discount rate for first-time students at private nonprofit colleges hit a record 56.3% in 2024-25, meaning a school listed at $45,000 might cost a middle-income family a fraction of that after institutional grants and need-based aid.⁴

By calculating these costs early, families have time to adjust their savings strategy, compare schools more honestly, and set expectations. It also helps with FAFSA preparation; families should complete the FAFSA as soon as it becomes available for the applicable school year and watch state and college deadlines closely, since some aid is limited or deadline-sensitive.

Through Summer: Estimate your customized out-of-pocket college costs for thousands of schools based on your state, household income, and savings plan, and find out if you're on track to cover them.

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When They're About to Apply: Find Scholarships and Grants

By junior or senior year of high school, scholarships and grants become a critical piece of the funding strategy. The College Board estimates $173.7 billion in total grant aid was distributed in 2024-25,⁵ yet an estimated $100 million in scholarship money goes unclaimed every year simply because students don't apply.⁶

Through Summer: Search 30,000+ scholarships matched to your student’s background and interests, without spending hours hunting.

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Graduates carrying heavy loan balances delay buying homes, save less for retirement, and often feel constrained in early career choices for years. Opening a 529 plan early, getting realistic about net college costs before applications go out, and pursuing scholarships and grants aggressively are steps that, taken together, can meaningfully change a family's financial trajectory.

Summer’s platform helps families do all of it in one place. Our full College Planning Guide also covers all of this and more — including loan comparisons, scholarship search strategies, and a detailed planning timeline from birth through senior year.

NYC Residents: Check out Summer’s tools to help estimate college costs, compare 529 plans, and find scholarships at summer.nyc.

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