The cost of a college education is rising so fast it is hard to keep up the pace. Currently we are seeing about a 7.9% average increase in college tuition costs to approx $7600 for public universities.
The overall increase for room/board/etc is a hair less at about 6.1% to about $16,000 PER YEAR for in state public university.
If you are lucky enough to get your child through college in 4 quick years…………(lol ahem) that is $64,000 in today’s dollars. At this current rate of increase it will quickly be over $100,000 for IN STATE, PUBLIC university education. Sadly $25.000 per year of college is really not to far off. If your kids are young like mine expect $150,000.00 PER KID for a college education. I have really only covered in state public. Out of state and private will add to the cost dramatically. Planning for these level of expenses is a necessity. I don’t believe it can happen by accident.
College is still looked at at the pathway to a higher paying career so like all things most will just continue to pay the high costs. Keep a few things in mind though: -Working part time and paying for college is a thing of the past. Earning $9-$10 per hour somewhere might pay for books but not much else. Most of the parents I meet with want to help at some level whether all or part.
- Even if you don’t want to pay for their complete college at least set aside some money for them or they will be riddled with debt for the rest of their lives. It is not uncommon for kids today to come out of college with a high 5 or 6 figure debt to pay. Even if you get a decent job, paying off that kind of money may take 20 years.
-The best part about saving is when your kid is lucky enough to get that full ride scholarship YOU GET TO KEEP THE $$$$ for your retirement or maybe it can be a house or investment in a business for them. There is not many downsides to a bucket of accumulated cash.
- 529 plans, roth ira’s, mutual funds, insurance policies, There are lots of ways to save for college. Truly there is no “best way” to save for college cost. Every family has a different situation and only this can dictate the “device” you use to save. Make sure you contact a professional to weigh all your options and fit them into you overall retirement and cash flow plan for your family.