Paul Ferraresi

The cost of higher education has increased dramatically, particularly at private colleges and universities. It may cost $15,000 to $40,000 per year in tuition, books, fees and room and board for a student to attend some private colleges. This does not include transportation, clothing, laundry and incidental expenses that frequently equal or exceed the basic tuition. This can result in a tremendous financial drain for a family with college age children.
How much should I save?

The size of the fund depends upon the number of children, their ages, educational plans, school selection, scholarships and student loans that may be available to them, student earnings and the amount of family income.

It also depends upon the attitudes of the family toward education. Some people feel they should provide their children with all the education they can profit from and want. Others, however, feel that children should earn at least part of their educational expenses themselves. If costs are substantial, it may even be necessary for a major portion to be financed by student loans.

How to finance a college education

Since loans must be repaid, many parents would like to avoid having their children start out heavily in debt. The payment burden can be substantial for a young couple, especially if both have education loans. There is also the idea that older children should help send their younger brothers and sisters through school after their parents have helped them. However, this is not a reliable source of funds because the siblings may not have the ability or willingness to provide this support.

The types of schools and graduate schools the children plan to attend also have a considerable bearing on the costs involved. An investment fund for educational needs is a relatively long-term objective, and it should be set up so the fund, hopefully, will not be needed in the meantime. Therefore, a less conservative investment vehicle seems justified in order to secure a more attractive investment yield. However, it would be unwise to speculate too aggressively with more than a small percentage of the fund.

Source: Don’t Miss Out: The Ambitious Student’s Guide to Financial Aid, 2003-2004