First they wanted toys, then computers. Now they want to go to college. The cost of raising children adds up, and rising college tuition multiplies the headaches triggered by a family’s already-dwindling bank account.
Between the 2006-2007 and 2011-2012 school years, average tuition and fees at four-year public colleges and universities rose by $1,800 in 2011 dollars, an annual growth rate of 5.1 percent beyond inflation, according to the College Board. Over the same period, tuition and fees at private colleges and universities rose by $3,730.
But planning ahead can prevent a future of sleepless nights -- tossing and turning as you fret over education expenses -- and graveyard diner shifts for your financially struggling student.
No matter how old your child is, it might be time to consider a qualified tuition program (QTP), also known as a 529 plan. For many families, such a plan offers a more convenient way to save money for college.
“I want my daughter to have enough money to go through school without taking out loans,” said Terri Knight, who works in the financial aid office at Red Rocks Community College in Lakewood, Colorado. “It is a proactive way to save for college,” referring to a 529.
Working in financial services at a college helped Knight see the importance of starting early. Her daughter is only 3 years old, but by the time she’s ready to leave the nest, her mother will have built up a nice nest egg for tuition costs.