Graduates celebrate at New York University’s commencement ceremony at Yankee Stadium. (Drew Angerer/Getty Images)

May 22

In the fall, my husband and I will have three children in universities: one in her second year of graduate school, one a junior in college and the other a first-semester freshman.

When they are finished, not one of our children will graduate with any debt. None. Nada.

How did we do it without hitting the lottery or the scholarship jackpot?

We started saving when our kids were wee little people, the last two before they could walk or talk. And the vehicle we used to save was a 529 plan.

Under a 529, if the money is used for qualified educational expenses, the earnings are not taxed.

But despite the fact that this tax-advantaged savings plan has been around for 22 years, a recent survey by the financial services firm Edward Jones found that 71 percent of Americans couldn’t correctly identify a 529 as a way to save for education expenses.

This is disturbing. The average published charges for in-state college tuition, room and board were $20,770 for the 2017-18 academic year, according to the College Board. Without taking into account inflation, that’s $83,000 for four years, if no financial aid is offered. For a private college, the price would be nearly $188,000.

“Every day people wait, they are falling behind,” said Danae Domian, an Edward Jones principal.

Families that lack savings often resort to taking out loans. This is also troubling, because a lot of people don’t know important details about their education debt, according to a Prudential Financial survey last year. Seventy-four percent of respondents were unsure about how much time they had to pay back their loans, and 53 percent didn’t know what their monthly payments would be.

No. 1: Saving in a 529 will hurt my child’s chances of getting financial aid.

Under the Free Application for Federal Student Aid (FAFSA), a 529 plan can reduce a student’s need-based financial aid package only by a maximum of 5.64 percent of the account’s value.

“The benefits of investing in a 529 plan outweigh any other financial-aid concerns that parents would have — especially the younger the child,” said James Mahaney, vice president of strategic initiatives at Prudential.

No. 2: Financial experts say I should concentrate on saving for retirement, because I can’t borrow to retire, but my children can borrow to go to school. 

This isn’t an either-or situation. You have to try to do both.

College graduates 35 and younger with education debt spend 18 percent of their income making loan payments, and 60 percent of them expect that they’ll still be paying off their loans into their 40s, according to a 2016 survey by Citizens Bank.

“The reality is most of us have to have a combination: long-, intermediate- and short-term savings goals,” said Ken Hevert, senior vice president of wealth management at Fidelity Investments.

No. 3: If my child doesn’t go to college, I’ll be penalized by the IRS.

If you don’t end up using the money in your 529 account for college expenses, you’ll have to pay ordinary income tax on the earnings when you take the money out. And there is a 10 percent penalty for a nonqualified withdrawal.

But the penalty and taxes are due only on the earnings, not on your contributions, which were made with after-tax money.

“The money is very easily transferrable to other family members,” said Roger Young, a senior financial planner for T. Rowe Price.

No. 4: I’ll have to pay a penalty if my child gets a scholarship.

I won’t get into how so many parents are delusional about their children’s chances of getting a full ride to college. But okay, let’s say your child is awarded a $40,000 scholarship. The 10 percent penalty is waived for the full scholarship amount.

You could withdraw the money and use it for whatever you like without paying the penalty. But you would still owe income taxes.

“I don’t run into too many people who say, ‘Oh, I can’t believe how much money I had left in my 529,’ ” Young said.

The cost of college is no joke. So are you ready to stop making excuses now?