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The education of our children is one of the most expensive projects we will ever undertake. Inflation has averaged around 2.5% to 3% over the last fifteen years. Unfortunately, that has not been true for college funding. College inflation has averaged around 5% per year. (1) Because of this variance in inflation rates, college keeps getting more and more expensive.
On the other side, having our children get a college education becomes more and more important. As we all know, the United States continues to move from a manufacturing economy to a knowledge economy. It’s no longer whether you know how to build something, but if you know how to make the pieces all work together. This means our children need higher skills sets to be successful in the future.
The first decision, what sort of school?
Private colleges often cost over $40,000 per year. Public schools are priced as an average in the $15,000 range. (2)
Many people we work with want their children to attend private schools. If it’s affordable and your children have the grades, then this is an excellent choice. Others will decide that it’s a better value to have their children attend public schools.
In either case, it’s important to begin talking with your children about what you will support. The earlier you begin this conversation, the better.
Step Two – Get Help
Most people we speak with would love to have their children receive some sort of financial aid in meeting college costs. The forms and requirements from colleges are extremely difficult to figure out. The formulas for how much aid you can expect are almost impossible to understand.
We recommend several consulting groups, who for a reasonable fee, can help you understand the options for your children. These are organizations that not only look at funding options, but also what school would be best for your children and their educational goals.
Having your children go through this process will help identify for both you and them the schools that would be best for them from an educational, social, career and economic point of view. Most children come out of this process with goals about what’s important for them and the motivation to follow through on those goals.
We suggest you begin this process when your children are between 12 and 14 years old. This allows your children to make appropriate choices for the high school and college education.
College Savings
Many of us dream about our children getting a full scholarship. This is a very rare occurrence. Many times some, if not all, of the funding must come from parents or the student taking loans.
In addition, many parents are trying to save for retirement at the same time they are paying for college education. We believe it’s important to have a completed financial model to help you work toward achieving both retirement success and education funding for your children.
We, at Stage 2 Planning Partners, are happy to assist in helping you create an economic plan and college plan that fits you and your children. And, we assist you in finding a consultant to guide you and your child in finding the right school and develop a plan on how to get into that school.
The key with college funding is early understanding and planning of your options. The options are not only what sort of school, but, what funding and savings options are available. With four years of college costing a minimum of $60,000, it only makes sense to invest a very small amount early to find what options work best for your long-term goals. Both you and your children will benefit from this analysis.
(1) (2) The College Board
If you would like more information or support from our firm, please visit us online or e-mail us and your Stage 2 Associate will get back to you.
With Warm Regards,
Stage 2 Planning Partners
Josh Patrick © 2006
Securities and Investment Advisory Services offered through NFP Securities, Inc., A Broker/Dealer, Member NASD/SIPC and a Federally Registered Investment Advisor.
Stage 2 Planning Partners is an affiliate of National Financial Partners Corp., The parent company of NFP Securities, Inc. Representatives listed on this website are currently registered to conduct securities business in the following states: AZ, CO, CT, FL, IL, IN, MA, MT, NC, NH, NY, PA, RI, VA, VT, WA
NFP Securities is not affiliated with Harris- Murray
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