Education Planning
Create a Higher-Education Funding Plan They'll Remember
One of the largest investments for many families will be their children's higher education. While the return on this investment can be worthwhile, the cost of higher education is formidably high—and rising.
This financial dilemma is causing real tension for parents wanting to help pay some or all of their children’s college expenses while saving for their own retirement years.
If the financial math doesn’t work, the unfortunate result is often excessive student debt, which becomes a serious financial yoke for young college graduates.
Student debt can play a constructive role in the college funding stack, too, but it works best as part of a balanced strategy along with education savings, work-study programs, grant-based financial aid, and scholarships.
More complicated planning entails college selection – private or public – the field of study, community college credits, and even trade school options. Hard conversations about the wisdom of spending a quarter million dollars for a religion degree may be appropriate as well.
To be sure, for many parents, higher education is often a retirement planning problem, since they may not be able to finance retirement and private college. That inconvenient truth makes it imperative to design a workable education plan as early as possible.
A good higher education plan will take a realistic look at your financial resources and define your priorities. It will quantify how much can you afford to contribute to your children's education fund without sacrificing your own goals, while exploring other funding sources at the child's disposal.
Recent changes in the Federal financial aid program and 529 higher education plans enable grandparents to play a larger role in funding their grandchildren’s higher education costs.
With so many moving parts to higher education, early planning can be of great value to families of all sizes and means.