SUMMARY: The cost of attending college has risen so quickly that most parents and students already know that they have to start saving money years in advance.Unfortunately, many people only think about the cost of tuition when they save for college. The true cost of college includes other factors, including fees, books, supplies and living expenses. Once you finish adding all of the expenses, you may find that paying for college sounds impossible.
TDECU Wealth Advisors offers several services that can help make college more affordable than it seems. Before you decide that you can't save enough money to pay for your children's college experience, you should consider how the following services will benefit you.
TDECU wealth advisors can project the true cost of college
During the 2017-2018 school year, in-state students attending four-year public colleges can expect to spend about $9,970. This amount includes tuition, fees, room and board. The same student attending an out-of-state public college will pay $25,620. Students who attend private schools spend an average of $34,740.
Unless the state of higher education changes dramatically, you can expect the cost of college to increase by 3 percent to 5 percent for the foreseeable future. TDECU takes this into consideration when planning your education goals.
TDECU's cost calculator uses several factors to estimate the true cost of attending college. Those factors include the student's current age, when the student will enroll, the education inflation rate and the name of the school that the student will likely attend.
If you have a 15-year-old student who plans to attend the University of Texas at Austin for four years beginning in 2021, the calculator estimates that you will need to save $100,858, including room and board.
That may sound like a lot, but at least you have an accurate goal that will help you establish a savings plan.
Start a 529 college savings plan
Once you know how much college will cost, the professionals at TDECU Wealth Advisors can set up a 529 College Savings Plan for you.
529 plans vary from state to state. Generally, though, you can expect to benefit from avoiding federal taxes on the money that you earn from the account. Your contributions are not deductible, but you still get to avoid taxes on the money you save and earn when you spend it on tuition.
Many states offer additional tax benefits that make 529 plans even more attractive.
Parents often prefer 529 plans because they maintain control of the accounts. The money doesn't automatically go to your child. Since you control the money, you get to make decisions that will benefit your child's future.
529 plans have lifetime contribution limits between $235,000 and $500,000. TDECU Wealth Advisors will help you choose an option that lets you maximize your contributions so you can save more money and avoid more taxes.
Get college fund planning advice from experienced professionals
Many people underestimate or overestimate how much money they can save when they plan for college. Since you probably don't have experience planning college funds, it's nearly impossible for you to make an accurate plan that helps you reach your goals without adversely affecting your budget.
TDECU Wealth Advisors has helped thousands of people plan for the financial reality of attending college. When you get advice from someone with that much experience, you can discover inventive planning options that you didn't know about. Until you talk to a professional, you don't know all of the opportunities to make college affordable.
The cost of attending college won't fall soon, so parents need to seek professional advice that helps them prepare for the inevitable expense. At TDECU Wealth Advisors, an experienced person can help you create a realistic plan that makes it possible for you to pay for tuition and other expenses.