When it comes to saving and investing, retirement is most likely your number one concern. For many investors, their second most significant concern is saving for their children’s college costs. At this point, most of us know about the effects of rising tuition, crippling student loan debt and the need for post-secondary education to make it into the workforce today.
For many parents, eliminating or reducing their children’s or grandchildren’s future debt burden is a must.
But, much like retirement, saving for college isn’t a simple one-size-fits-all approach. There are many avenues and account types that investors can consider for this goal. Getting a handle on what works best for you is critical to making sure you get the most bang for your buck.
A Staggering Jump in Costs
It’s no secret: college is expensive these days. From actual tuition to room and board, the amount of money needed to attend a four-year university is pretty staggering. According to industry group the College Board, in 2014-2015 the average annual tuition increase was 3.7% at private colleges and 2.9% at public universities. However, the ten-year average is closer to 5% per year. Putting that in real numbers, it’ll cost someone around $94,000 to attend a four-year public university by the time the calendar changes to January of 2033.