According to the Bureau of Labor Statistics, tuition costs have increased on average 6-8% per year for the last 30 years. This means that children born today will face college costs that are 3 to 4 times current prices by the time they enroll.
Financial aid from the government and colleges along with private scholarships account for less than 33% of total college costs. Therefore, parents should expect to pay the bulk of their children's college costs through a combination of savings, current income, and loans.
The most important step parents can take is to start saving for their children's education as soon as possible, even as early as the day the child is born. Time is one of your most valuable assets. The sooner you start saving for college, the more time your money will have to grow. Even if college is just a year or two away, it is never too late to start saving. There are tax benefits to saving in a 529 college plan, and every dollar you save is a dollar less you'll need to borrow.
We can help you with all of the following pieces of your college plan:
- Estimate how much college will cost in the future for various public and private universities
- Calculate how much you should save each month starting today
- Choose the right mix of investments and the right investment vehicles
- Take advantage of all the applicable tax benefits available for college saving
- Maximize your financial aid benefits available from the government and colleges
- Execute the right strategy to draw down your investment when it comes time to pay for college
