When planning for your child’s college fund, most people don’t understand the funding options available to them and the student. In continuation with their partnership with the financial institution, Sands Academy is committed to helping Team Members with support programs that assist in their professional lives as well as their personal lives. Bank of America recently held a workshop to outline what is needed in order to pay or help pay for college.
“A college degree leads to higher incomes these days so more people are attending college after high school,” Thomas Gough, Assistant Vice President, Financial Solutions Advisor said. “Four-year college tuition is going up and it shows no signs of going down. It’s accelerating faster than most people thought. Parents now are cutting back on their lifestyle in order to help pay for their child’s education.”
In 2014, the average four-year in-state tuition was $99,452. It is projected to be at $267,801 and for four-years at a private college, the cost is believed to be at $527,236 by 2032. With rising costs, parents are looking to other alternatives that can ease the burden of paying the full tuition. 31% take advantage of grants and scholarships, if applicable to the student, and 30% of tuition comes from parent income and savings.
“With grants and scholarships, there is so much money available… you just have to find it,” he said. “With this type of financial assistance you always have to make sure that grades are up and that the student is active in activities. With savings, the parent has to either have enough or be willing to consider an alternate method to achieve the goal.”
With student loans, the student starts out with debt after college graduation. If they don’t have a job right away, they start out in a bad financial situation. Gough emphasized the importance of various programs, ranging from a Section 529 Plan that the money can only be used for room and board or tuition at an accredited university, to specific accounts that can only be used by the beneficiary that is named and funds can be withdrawn tax-free under certain circumstances.
“Most parents us a combination of plans to help meet their goals,” Gough said. “That’s why it’s so important to set goals early on when the child us young. You can determine what investment vehicle is best for you, start investing, and evaluate the progress as you go. If it’s early enough and something isn’t working or maximizing your money, you have time to reset and go in another direction in time for them to attend college.”