College Planning
College planning and practical solutions for funding college. What is the most effective way to save for your children’s college education?
Paying for a college education can be a huge task and one of your largest expenses over your lifetime.
College tuition costs are growing at a significant rate. Paying for a child’s or grandchild’s college education tomorrow requires forward thinking and college planning today.
College Expenses
Tuition – Tuition is usually the single largest expense when it comes to college. Depending on public or private school, this amount can vary drastically. If the student will be attending an in-state public college it could be as little as a few thousand dollars per year or as much as $35,000 for out-of-state and private colleges. Schools generally require students to pay at least a portion of the tuition before classes begin. If you are looking into the future, you will also want to consider the impact of inflation on tuition costs.
Books – Book costs vary greatly depending on the school and the course. Larger hardcover books typically cost the most, often as much as $200 each. Typically you will want to budget at least $500 per semester for books.
Supplies – Supplies are a part of education. It’s a good idea to budget for a constant supply of pens, paper, notebooks, binders and other items such as calculators.
Computer – Computers are a way of life now, especially for college students. So, you’ll want to consider this cost as well. Students usually have access to computer labs, but hours and space may be limited.
Programs and Fees – Some programs may also come with extra fees for labs and/or equipment. This will vary with the school.
Living Expenses
Housing – Housing is usually the student’s other major expense and again will vary depending on your location. Colleges typically have student dormitories or housing that can save time and money. with a range of prices to suit most budgets. If your student lives off-campus, you’ll also have monthly utilities and other bills. And, there’s also the option of living at home and commuting.
Food – Food and meals can be a large expense as well. Most colleges today have prepaid meal plans that students can use on a debit basis, much like a debit card for meals they eat on campus. You will probably still need to budget for when your student daughter goes off campus or orders pizza. If they have special dietary needs, make sure the meal plan covers them.
Laundry – Laundry can be done on campus and most residences will a have coin operated laundry. You will also have to buy laundry detergent and supplies. As you know, this will be less expensive at the grocery store than from dispensers in the laundry room.
Phone – Cell phones are pretty much a requirement these days for college students. If you’ll be paying this bill, you’ll want to factor that in as well.
Internet – Internet services are typically provided on campuses today. Students may be required to pay a monthly fee for access to the wireless network.
Medical – Medical and dental expenses become an issue with students leaving home. Many schools cover insurance in their tuition costs if the student visits the on-campus facilities. If your student already has coverage, you may be able to opt-out of this coverage.
Other Expenses
Parking – Parking and/or transportation can also account for a major expenditure. Along with the vehicle there is also fuel and insurance costs to consider. Again, living on or near campus can reduce these expenses. Public transportation may be available and often offers student discounts.
Clothing – Clothes and fashion play an important role with students. Keeping up with the latest trends is important to most young people. You’ll also want to consider the climate as coats and boots typically cost more.
Entertainment – Entertainment expenses can vary drastically with the student. Depending on your students habits, this is one cost that can be reduced or practically eliminated by utilizing on campus programs and the internet.
College Planning with Whole Life Insurance
1. The life insurance policy can become self completing in the event of a premature death or disability.
2. The gains within the policy are “locked in” versus being subject to investment market fluctuations.
3. Tax-favored access to cash throughout the policyowner’s life.
4. Eligibility for financial aid is typically not affected by the existence of a life policy.
5. The policyowner is in control of the assets instead of the child, as is the case in some other asset ownership
saving options, such as UTMAs or UGMAs.
6. The policy’s cash value can start building before your child is born.
7. Whole life insurance does not have to be designated to a single child’s educational goal. It’s also a flexible cash
resource you can use for any other future financial objective.
8. Outside of the actual policy design, there are no contribution limit restrictions set by the IRS.
9. Unlike some education savings plans, there are no set income restrictions (except for insurable interest considerations in the underwriting process).
Get started, schedule your college planning consultation. Follow this link to contact us for a no cost consultation and we’ll help you plan for the most effective way to pay for college.
Learn more here: https://collegecost.ed.gov