College Planning

Educating your children will undoubtedly be one of your biggest financial challenges. Today the cost of many “ivy league” schools is over $30,000 a year! The bad new is that College costs are rising.

According to the College Board tuition, room and board at a four-year public university is up 14.1% in 2003-2004 school year over the previous year, while the average private school tuition is up 6%. Even two-year public schools have had hefty 13.8% increases from the previous year.

Even at a more modest 6%, the cost of attending a four-year private school 10 years from now could be over $154,000! This is more than many people paid for their homes!

How are you going to pay for it?

Don’t let the “sticker shock” paralyze you. You may be able to afford the college of your choice…If you start early and plan ahead. About one-third of all students attending four-year institutions pay less than $4,000 for tuition and fees per year, according to the College Board.

For most families paying for college for one, two, three or more children will require some forethought and planning. DeVane Financial Advisors can help you create a realistic strategy for your children’s education.

When should you start saving for college?

As early as possible. It is important to put time to work for you. The value of compounding – even small amounts of money – over many years is critical to making a plan work. For example $192 saved each month from the time little Susie is 2 years old will grow to $88,238 at 8% average annual return by the time she is 18 and ready to start school.

Even if you can only spare $50 or $100 each month, the earlier you start, the better off you will be. We can even have your payments automatically deducted from your checking account to put the process on “autopilot”.

The type of plan is also important. Should you have a 529 plan? A Coverdell Education Savings Account? A Roth IRA? We can make the process of selecting the proper vehicle easier!

What about Financial Aid?

Loans, Grants and work-study programs and scholarships are all a realistic part of an education plan. Financial aid is awarded based primarily upon financial need and secondarily upon student’s merit. It is important to apply for college financial aid early, apply to multiple colleges and be able to avoid certain types of income that could reduce a financial aid award.