Education costs continue to escalate. The cost of educating children seems destined to continue outpacing the overall cost of living. The average cost of attending a four-year, private college for the 2009/10 school year was $35,642. (College Board, Trends in College Pricing). If prices continue to increase at 5% per year, the four-year total bill for a child who entered college in 2009 will be $149,700! Of course, some more exclusive schools cost even more than this. Parents of today’s infants and toddlers face more daunting obstacles. At the same 5% rate of increase, the total cost of attendance in 18 years will be $342,000!
The Financial Crisis Hits Home. The recent financial crisis has made planning for college even more challenging. Student loans are becoming harder to come by. Scholarships are disappearing. College endowment funds have been crushed by the stock market collapse, which is likely to limit the amount of aid available from schools themselves. But, there is hope!
Importance of Starting to Plan Early. I don’t want to nag. And, I know you already know this. But, clearly, those who plan ahead and save throughout their child's life have more options available to them. Systematic savings of even modest amounts over a toddler’s lifetime can add up to some pretty big numbers if prudently invested. Planning ahead, preferably soon after your child is born, offers the best chance for success.
So is it too Late? If you have not started saving, it’s never too late - get started now! Even if your child is in high school, it’s still not too late to start "biting the bullet", although strategies will be quite different than for the parent of a toddler. For parents of teens, we want to help look at all available resources to determine how best to pay the bill. We will also consider strategies to maximize both need and merit based aid as appropriate.
Consider Long Term Consequences. We help you and your child to consider and understand the long term impacts of the college funding decisions you are making today. What will the total loan burden be for the student, and how will that impact independence and lifestyle after graduation? What about the impact on the parents retirement plans? Are there other more affordable options worth considering? College funding decisions are not made in a vacuum, and must be considered in concert with other individual and family goals.
A lot to think about... The official cost of attendance statistics do not take into account scholarships and financial aid received by many students. But before you decide financial aid is the answer - have you done your homework? What kind of aid is likely to be available given your family's financial situation? Will aid be in the form of grants, or loans that need to be paid back? What about merit aid, or athletic scholarships? What amount will your family be expected to contribute? How much debt do you want your child to bear? How much debt can you bear without impacting your own retirement goals? What role does tax planning play in the college funding decision? We can help you answer all of these questions and others that will come up during the planning process. Wouldn’t it be nice to know that you can talk to someone who is always available to answer your questions?
Credentials. “Been there, done that!” In addition to being a Certified Financial Planner(tm), I am the father of four high school and college age children. I have thus taken a keen interest in the specialty of College Financial Planning. I have studied extensively on the topic of college admissions, financial aid, and college savings options. Most importantly, as a financial planning generalist, I am able to apply a holistic planning approach, as parents need to protect and plan for their own retirement as well as put Johnny and Janie through college.
Whether your children are ready to leave the nest, or still in diapers, I can help you be prepared to provide your child the lifetime of opportunities a quality education affords. Call or email me to arrange a free (there, I said it again!) consultation. You’re going to feel better about the future -- yours and your children’s!
Advisory services offered through Creative Financial Designs Inc., a Registered Investment Advisor. All securities offered through CFD Investments Inc., a registered broker/dealer member FINRA, SIPC, 2704 South Goyer, Kokomo IN 46902,(765)453-9600. Financial Pathways, LLC is not owned or controlled by the CFD companies.
