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If you’re like most Americans with school-age children or grandchildren, you may be wondering how you can ever save enough money to send them to college. Every year you hear that college costs are rising more than inflation and that, 18 years from now, it will cost a lot more to send your child to public or private school. My son is almost two, and the cost of college is already on my brain.
Even if you can’t save a lot, you can still take advantage of a college savings plan. With this in mind, I thought it would be helpful to take a look at some popular ways to save for college. I condensed the information into 10 questions people frequently ask me about college savings.
1. How can I estimate future college costs?
The FinAid.org cost calculator can help you figure out how much a particular college will cost at the time your children or grandchildren will attend. It’s a little more generic in nature, but it can give you a good sense of what the basic costs might be. In working with clients, I also have a software program that I use that has a list of most colleges throughout and you can get a real sense of what the estimated cost for an actual college might be.
2. Why start a college savings plan early?
The longer you wait, the more money you’ll need to save to meet your goal. By the time today’s newborns are set to enroll in college, four years at a public university will cost more than $200,000. While getting an early start is key, it’s never too late to begin saving for the educational objectives of those you care about. Doing so can make a meaningful difference — by potentially reducing the amount you or the account beneficiary may need to borrow to pay for school. […]
