Gary W. Pelletier, CLU, ChFC, AIF®

Northeast Planning Associates, Inc.

Corporate, Estate

& Financial Planning


Springtime is College Time

| March 26, 2019
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Spring is here.  The birds are singing, the flowers are blooming – and families are making college decisions.  While college enrollment in the U.S. has been flat for the last few years, the rate still hovers around 70%.  College remains a major consideration for families with children. 

Whether you have a child who is rapidly approaching college admission or just starting to plan for college for your youngsters, here are some key things to consider as you prepare.

Consider Staying In State –  According to College Board’s 2018 Trends in College Pricing report, the average total annual cost (including tuition, fees, room and board) of a four-year public university was $21,370.  This is compared to $37,430 for out-of-state public universities and $48,510 for private schools.  When room and board is removed from in-state costs, the disparity is even greater.  Whether saving to send your child to college or if your child will be taking out student loans, discuss attending college closer to home.  This could give your child a head start by reducing costs and student loan debt.

Have Paperwork to Have Access to Medical Information – Consider a hypothetical couple Joe and Jane.  Their 17-year-old daughter Juniper is off to college in the fall and she will turn 18 during her first semester.  Due to HIPPA regulations, her parents at that point will have as much right to make healthcare decisions or even see health records as a stranger would.  It is important to have a Healthcare Power of Attorney for your teenage child should the need arise for healthcare decisions to be made.  Your child’s primary care physician and college should be provided a copy of this form.

Starting to Save?  Be Sure to Factor in Inflation – Compared to 1988-89, costs of tuition, room and board for 4-year institutions increased by 2-3 times on average.  This increase has been more modest recently (3.1% per year between 2009 and 2018), but still outpacing inflation during this time.  Based on this information, when planning for college, consider using an inflation rate between 6% and 7%.  If you’re looking for a free, easy to use calculator, try Googling SavingforCollege.com’s “World’s Simplest College Cost Calculator.

Are the Child’s Grandparents Looking to Help?  There are four options, but each will have a different impact on financial aid, so they must be considered carefully.

Information in this material is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.

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