Education Funding Is More Than Saving for the Cost of College Tuition
Providing your child the education you want him or her to have isn't just about finding the right college and paying the tuition bills as they come in. The actual cost of education starts much earlier than that.
Education expenses start hitting early, regardless of whether you send your children to a private school or a public school. Tuition and fees (if applicable), books and supplies, special needs services, academic tutoring, and even computer equipment for your home may factor in to the actual costs of sending your child to school.
You may already know that college costs have been rising faster than inflation (as measured by the consumer price index). In fact, though the average rate of inflation for college costs ranges from 5% to 8%, there have been years that it was higher than that.1
What that really means is that if your child plans to attend a four-year public (in-state) college or university beginning in the fall of 2006, you can expect to pay an estimated $59,000 for four years.1 But if your child won't start college for several years, it will probably cost you even more.
When developing an education savings plan for funding education expenses, it's important to understand the benefits of saving for education expenses (versus borrowing) and the tax advantages that come with the different education savings alternatives, such as 529 college savings plans, Coverdell Education Savings Accounts, custodial accounts and regular brokerage accounts.
