After a house and several cars, college is one of the largest expenses
that many families face. In 2017-18, the average cost of tuition and fees was
$9,970 for public colleges (for state residents) and $34,740 for private
colleges.
Despite the high cost, an investment in a college education is generally worth it. According to a study by Georgetown University, the difference between the lifetime earnings of college and high school graduates is $1 million and the difference between the highest- and lowest-paying college majors is $3.4 million.
Below are three college financial planning tips:
Despite the high cost, an investment in a college education is generally worth it. According to a study by Georgetown University, the difference between the lifetime earnings of college and high school graduates is $1 million and the difference between the highest- and lowest-paying college majors is $3.4 million.
Below are three college financial planning tips:
¨
Do the
Math- Estimate the cost of a college education with an online college
savings calculator. Select a
few “representative” types of schools such as a community college, state
university, and private college.
¨
Match
College Savings Time Horizon and Investments- Consider stock mutual funds
for college savings for children in elementary school and younger. Once a child
enters middle school, gradually shift into fixed-income (e.g., short- and
intermediate-term bond funds) and cash (e.g., money market fund) assets.
¨
Start at
a Community College- Transfer later to a public or private four-year
institution. Students have the dual advantages of eventually receiving a
bachelor’s degree from a four-year college and saving thousands of dollars of
savings on tuition, fees, and room and board expenses. Check with both schools
in advance about guaranteed admission agreements, course prerequisites, and
requirements to transfer credits.
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