College
costs have been increasing at more than twice the rate of
inflation for over thirty years and will continue to rise
in the future. Estimating future college costs can be difficult.
Many factors must be considered, including public vs. private
colleges, in-state or out-of-state residency status, and living
arrangements (on-campus vs. off-campus).
Most states have established college savings plans to encourage
parents to save for future college costs for their children.
There are two main types of college savings programs: prepaid
tuition plans and savings plans. Each plan has its advantages
and disadvantages.
You
can find detailed information about each plan at:
•
The
College Savings Plans Network
The official 529 plan web site, sponsored by the State
Treasurer’s Association, where you can find links
to plans in your state.
•
Saving
For College
Operated by Joseph Hurley, this web site provides regular
updates on college savings plans. You can find details
about each plan's strengths and weaknesses.
Note:
•
According
to the U.S. Department of Education, the average cost
of a four-year education at a public university is currently
$34,000, and almost $90,000 for private colleges. Over
the past decade, expenses at public institutions have
increased nearly 40%, and costs will almost certainly
continue to rise.
•
Data from
the U.S. Census Bureau indicates that a person with
a bachelor's degree earns on average over 80 percent
more than a person with only a high school diploma.
According to The College Board, a college graduate is
likely to earn, over a lifetime, $1,000,000 more than
a high-school graduate — which certainly can make
going into debt for education a wise long-term investment.
