Itâ€™s time for March basketball tournaments. Yep, when everyone fills out their brackets and watches some of the best college players in the country go head-to-head.Â But did you ever realize how expensive some of these schools are? Well, hold onto your pom-poms because itâ€™s getting expensive out there.
Thatâ€™s going to leave a mark
Cost per year Based on 2017-2018 out-of-station tuition, fees, room and board:3
â€¢ Duke: $69,291
â€¢ Notre Dame: $66,604
â€¢ Princeton: $62,494
â€¢ UVA: $58,024
â€¢ UCLA: $56,856
â€¢ UVM: $52,322
â€¢ UNC: $46,940
These kinds of costs can set off a different kind of madness as parents begin to wonder, â€œUm, where is that money going to come from?â€ Or you could just send them to my alma mater, Michigan State University at $39,460 for a good education and stellar basketball.
Scholarships and loans
Some families can get loans. But if you make too much, itâ€™s more difficult. “We generally hear that schools attempt to meet the full need for students from families whose household income is below $75,000,” said Joe DePaulo, the founder ofÂ College Ave,4 which offers private student loans to families who find themselves in this funding gap. â€œAs family income increases, aid declines. Very little is offered once incomes approach $200,000,â€ DePaulo said.
Beyond getting loans, thereâ€™s the popular 529 college saving plan. It offers several benefits:
- Your investment grow free from federal taxes if used for qualified college expenses
- Your child can attend almost any college, no matter where your 529 is based
- Anyone can fund it (so start begging your grandparents)
Also, if you happen to need the money for something other than aÂ college education, you can withdraw it. Just keep in mind youâ€™ll get hit with a 10% federal penalty on the earnings (However, there may be no withdrawal penalty if your child receives a full scholarship).
Early bird gets the worm
If youâ€™re the type of person who plans ahead, you can set up a 529 account when a child is born, which will give you nearly two decades of potential earnings. How much should you save? If you can manage it, aim for enough to cover at least one-third of future college costs. For a child born this year, that means saving roughly $250 a month from birth until his/her future enrollment in a four-year college.
Yes, college is expensive. But with some insight and a head start, you can help make saving for college a little less painful. That way when youâ€™re watching schools battle it out on the court, the only thing youâ€™ll have on your mind is your bracket.
Richard Feight is aÂ Fee-Only Certified Financial Plannerâ„¢ and ProfessionalÂ NAPFA-Registered Financial AdvisorÂ at IAM-Financial. Rich has 20 years of experience offering low cost â€œFee-Onlyâ€ comprehensive financial planning and investment advice. For more information, email:Â firstname.lastname@example.org
This information is provided to you as a resource for informational purposes only. It is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. Assets in a 529 can accumulate and be withdrawn federally tax-free only if they are used to pay for qualified expenses. Earnings on nonqualified distributions will be subject to income tax and a 10% federal income tax penalty. Contribution limits vary by state. Refer to the individual plan for specific contribution guidelines.