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Friday, March 18, 2011

College Costs in 2026

Our oldest son, Roland, will be 4 years old in June.  I'm already thinking about the cost of college tuition in 2026, when he graduates from high school.  My husband and I started a 529 Plan shortly after he was born, and contribute monthly towards his college education.  Yet, I cringe to think about the cost of tuition when he walks across the graduation stage.  Our youngest son, Joshua, will follow in his older brother's footsteps 2 years later in 2028. The College Board's website highlights current tuition costs:
  • Public four-year colleges charge, on average, $7,605 per year in tuition and fees for in-state students. The average surcharge for full-time out-of-state students at these institutions is $11,990.
  • Private nonprofit four-year colleges charge, on average, $27,293 per year in tuition and fees.
  • Public two-year colleges charge, on average, $2,713 per year in tuition and fees.
Rather than worrying myself sick about the rise in college tuition and inflation, which I can't control, I'm staying optimistic about the possibility of paying for college.  I can imagine in 2026 those numbers will have at least doubled.  (The College Board reports that on average tuition and fees for 2010-2011 will increase 6% annually.)

My background is in higher education, and I worked in admissions at a southeastern university of art and design for almost 8 years.  One aspect of my job was to encourage prospective students to apply to the university.  Throughout the years, I assisted in enrolling hundreds if not thousands of students into the institution.  Each year, the tuition would increase slightly, along with other universities across the country.  This caused my sales pitch to become a little more sensitive.

Oftentimes, parents would ask to speak with me privately and their eyes would welt up from the necessity of wanting to provide the best for their child.  I found myself grabbing boxes of tissue, holding hands, and giving a comforting pat on the back to parents struggling to find ways to pay for college.  I assisted parents on brainstorming ways to help pay for college despite the high tuition costs, and derived a combination of student loans, financial aid, or scholarships.  Like most colleges and universities, if students score above the national average on their SAT/ACT exams and have a fairly high GPA (usually above a 3.0), then they may have the opportunity of earning a college scholarship.

Some students contemplated whether or not they should attend college.  The U.S. Census Bureau report titled "The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings" highlights that over an adult's working life those with master's degrees will earn $2.5 million, adults with bachelor's degrees, $2.1 million, and those with high school diplomas can expect to earn $1.2 million.

Rather than putting the emphasis on or tantalizing about college tuition costs for our children, I've decide to follow my own advice and focus on researching the resources that are available to us that will assist with college.
My advice for parents is to always ask questions.  Admission and financial aid officers are in a customer service profession and their jobs are to assist students and parents.

Although our sons are nearly 4 years old and 14 months old, I've already started instilling in our children the importance of higher education.  I have a “college wall” above the bookcase in our oldest son's room with pendants from various universities.  My Father-in-Law attended Tuskegee University in Tuskegee, AL and insists that I purchase a "Tuskegee University" pendant the next time we're there.

I was immersed into higher education at a very young age.  My dad, being a professor, allowed us the opportunity to move from one college town to another.  Having that experience, gave me the opportunity to interact with college students and attend university functions.  There are so many wonderful institutions in Atlanta and the South, that I often take our oldest son to various events on campuses.  Planting the seed early is crucial, and staying open-minded about their future is also important.

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  1. Good Blog Sojourner!!! Yes tuition costs are continuously rising and paying for college for your child is always an issue. Some costs and fees associated with college these days are enough to make some parents cringe. This is why websites like FastWeb (That you mentioned) and FAFSA are very important when it comes to education. Students can get up to 5,300 dollars in free money for just filling out that form!
    Another thing we have to look at is Universities placing our students with jobs. There is no reason to be paying an awesome amount in tuition if the return for the education investment is not there. Universities must be focused on providing quality experiential learning and project based curriculum that students can use after they graduate. Science and technology disciplines do a great job of providing this experience. Simultaneously 50% of the jobs in the next ten years are going to require a degree in science and/or technology anyway. We have to get students to jump on the STEM band wagon early.

  2. Isaac - Very good points! Strong Career Development and Placement Centers are so important for colleges and universities. It's about getting a job once you graduate! Thanks again for the comment!

  3. There are so many many organizations that offer scholarships. Do not overlook their value. Civic organizations like Kiwanis (Circle K), Jaycees and Rotary Clubs to name a few. As well as Junior Chambers of Commerce. It is not always solely based on test scores and gpa. do not let those factors inhibit your in your search. As a father of five, I will look far and wide into every source before discounting it. Also coming from an FA background having made the switch to high school admissions has opened my eyes to the rising costs of higher education, which is deeply embedded into my children's ever expanding minds.

  4. Thanks for the post Mark! Great suggestions! Kudos to you and your kids!

  5. It is great that you started the 529 plans early and still contribute to them. One concern that I have seen is that the money you save and the tax deferred gains that you accumulate may be held against you when it is time to apply for financial aid. Because you have accumulated this money for college, your need for aid is less. Furthermore, someone who has not been as responsible as you may receive aid. There are other options. Cash valued life insurance helped my parents send all 5 of their children to highly competitive colleges & universities. It also helped send 2 of my siblings to law school and one sister to medical school.

    The important thing is to make a plan that is implementable and sustainable. Then stay with it.

  6. Paul - Thanks for the post and information on cash valued life insurance.