College and Education Planning

What Is The Best Savings Plan For College?

The expense of educating children has become one of the greatest financial burdens facing parents because the of the large and constantly increasing annual cost and because of the increasing number of years of college and graduate or professional school education required. Except for the purchase of a home and the accumulation of a retirement fund, paying for school is one of the highest priorities and one of the most expensive decisions a parent will ever make.

How much funds are needed will depend upon many factors including the family's educational goals and the time remaining until the goals have to be met. Families often have some combination of the following goals:

• to provide private school education at the elementary and secondary level,
• to provide funding of all or a portion of the college costs of one or more children at a private institution,
• to provide all or a portion of the college costs of one or more children at public institutions,
• to provide funding for all or a portion of the other educational programs such as graduate or professional school education for one or more children and,
• to provide an education fund for grandchildren or other.

CLICK HERE to learn more about the best college saving plan

The Financial Freedom Group, LLC can help you with estimating the future cost of colleges and universities through the use of various financial planning software and computer programs that we utilize in educational funding. There are many choices with regards to funding and we can help individuals and families determine the best method for this financial goal and provide valuable tools to get you to your desired destination. 

With over 4,900 degree-granting institutions offering post-high school education in the United States, choosing the right school can be confusing. Although the final choice is an individual one, careful (and early) planning is essential. The following list of key points can help in the decision-making process. 

For many, accumulating funds for the children's education is a savings goal that is often thought about, but seldom acted upon. There are numerous reasons why saving for college is an essential need. 

• Economics: Statistically, the average worker with a 4-year college education earns far more than the average worker with only a high school diploma. 
• Increasing costs: In recent years, college costs have increased at a rate greater than the general rate of inflation (Average 7.1% vs. Inflation at 2.4% over the past 20 years). However, in 2021 inflation soared to 4.7% and in 2022 is ended at 6.5%! Still .6% Lower than the average inflationary rate for college.
• Years of study: Four years of study may not be sufficient. In many professions, six or even eight years of study are required. 

Admission

One of the first questions a student faces is whether or not he or she will be accepted for admission to a particular school. 

• Qualifications: Does the student have the necessary academic and personal qualifications? 
• Ability to pay: Does the school consider ability to pay as a factor in considering an application? Most colleges evaluate applications on a need-blind basis.
• Popular schools: Certain, popular big-name schools may be extremely difficult to enter simply because an overwhelming number of students apply. Less well-known schools may provide an equal education and have admission standards less difficult to meet.

Cost of College

With the continually rising cost of a college education, paying for school is often a major concern. 

• Affordability: How affordable is a school? In general, public schools, supported in some part by tax dollars, tend to be less expensive than private institutions. 
• Living expenses: A family may want to weigh the cost of dormitories or off-campus housing versus the cost of having the student live at home and commute to a local school. 
• Cash flow or savings? Can the education be paid for from current cash flow? If not, has enough money been saved to pay for the entire education or are additional funds needed? 
• Student debt: Is the student or family willing and/or able to take on the financial burden of student loans? 
• Financial aid: How much and what type of financial aid can a school make available? Some forms of aid are based on need, others on merit.
• Scholarships: Are there scholarships available for which the student may qualify?

Academics

What type and quality of education does the institution provide? 

• Specific programs: For those individuals who have a clear idea of what they want to do in life, does the school have the specific type of education and training needed? 
• Breadth: For students who are less sure of their career goals, does the institution offer the breadth of courses and majors needed for a good liberal arts education? Can a student be undeclared until a major is chosen or must a major and course of study be decided upon immediately? 
• Academic standards: Are academic standards rigorous or relaxed? 
• Time to complete: Can a student complete a course of study in four years? Overcrowding may mean that key required courses are not available when needed. 
• Class size: Are classes large or small? Do the professors do the teaching or is much of the teaching done by graduate students? How much personal contact is there between professors and students? 
• Special programs: Are there special academic programs available, such as internships or study abroad programs? 

Personality

Each college or university has its own personality. Will the student enjoy living and working at a particular school and with a particular student body for four years?

• Size: Large institutions can offer greater choice, both academically and in extracurricular activities; however, their enormous size may be intimidating to some students. Smaller schools can be more personal, with greater opportunities for student involvement. 
• Single sex: Some students may feel more comfortable and perform better academically at a single sex, rather than at a co-educational institution. 
• Religious affiliation: A religious focus to campus life may be an important consideration for a student. 

Student body diversity

Is it important that a student body be widely diverse? Or, would a student feel more comfortable at a school where one ethnic or socio-economic group is predominant

• Social life: What is the predominant "flavor" to the social life on campus? 
• Athletics or other extracurricular programs: Does the student have an interest in a sport or other extracurricular activity that may not be available at certain schools? 

Location

Very often the geographic location of a college is a major factor in deciding which school to attend.

• Locale: Should the student live at home or move out to attend school? 
• Distance: How far is a school from home? The cost of round-trip transportation between home and school can affect how often a student is able to return home. 
• Housing type: What type of housing is available? Do most students live in school dorms or is off-campus housing the preferred choice? 
• Community: Urban, rural, or suburban? Institutions located in large cities offer diversity, while schools located in rural areas can offer an intense sense of community. Institutions located in suburban areas can offer both.
• Region: Which part of the Country? A student from one part of the country may simply want a change and choose to attend a college in a different area. For example, a student raised in a large city may want to attend a school located in a rural area; a student from the Northeast may want to study on the West Coast. 
• Safety: How safe is the school environment? Federal law requires colleges to make campus crime statistics available to students and applicants. 

What is a College Education Worth?

College educated; full-time workers statistically enjoy a higher median income than those with less education. In a recent report on education and earnings, the Census Bureau found that those with four years of college could expect to have substantially higher annual earnings than high school graduates. 

Over a lifetime of work, 39 years on average, a four-year college education can increase a man's total income by over $1,117,311. Because of time spent raising children, the average woman spends 28 years in the workforce. A college education could increase her lifetime earnings by over $547,064.

What Does a College Education Cost?
In recent years, college costs have often exceeded the general rate of inflation at approximately 7.1%per year.