Educate yourself on college expenses

Helping your children pay for college is one of the biggest and most important challenges you will face.

Currently, a four-year education (tuition, fees, room and board, supplies and personal expenses) can range from almost $120,000 at a public college to more than $280,000 at some of the most expensive private institutions, such as Boston University and the University of Chicago. With expenses expected to continue to rise at the current rate of 5% per year, the costs could skyrocket to $135,000 for a public college and more than $310,000 for a private institution for a student graduating in 2023.

Making matters worse, planning for college gets more complicated each year because of the everchanging rules, regulations and tax laws.

Feeling overwhelmed and confused, many parents fail to develop an effective plan, leading to burdensome debt affecting parents and students for years to come.

Some parents also have unrealistic expectations and make false assumptions regarding the availability of financial aid. Though in many cases, parents and students will not be forced to bear the entire cost of the education, most college financial-aid administrators agree that parents overestimate the amount of financial aid their children will receive and have a false sense of security.

Therefore, you should not base your college savings plan on the hope of a generous financial-aid or scholarship package that may not come to fruition. The fact is, about half of all college students get no such money at all and instead have to pay the full price of college by borrowing, working or withdrawing from their savings.

That’s the bad news. Now here’s the good news.

Developing an effective college savings plan is achievable if you keep it simple and are willing to invest the time and effort to stay abreast of the changes in regulations and learn how to use the tax and investment options available to you. Also, for those of you who start saving early, you have time and the power of compounding on your side. Even small, regular contributions to a college savings plan can go a long way to defraying the costs.

One of the most important things you can do as a parent is to help educate your children. Planning, saving diligently, doing your research and applying some good, oldfashioned common sense will allow you to help your children pay for college when the time comes.