La Crosse Tax Pro Explains The College Financial Black Hole, And How To Stay Out Of It
If Planning To Fund Your Child’s College, Better Start Saving
LA CROSSE, Wis. – The cost of college is rising. In the last 10 years, in-state public four-year college tuition has increased 5.6% annually. The total average estimated cost for public in-state four-year students can run anywhere from $65K - $90K. Tax specialist, Reginald K. Boldon, CPA, shares some numbers.
“The trouble with college is that it’s so much more costly now than it once was. Plus, rates are still going up. If your children are still young, start saving $430 monthly for in-state tuition, fees, room and board. Or, double that for average private institutions. Plus there’s all the extra costs like phone, food etc. that come along with college. It becomes like a financial black hole. Thankfully though, planning properly can keep you from getting sucked in,” Boldon said.
Students now graduate with larger debt loads than they did a decade ago. Students at public four-year colleges graduate with $19,800 in debt on average. Students attending nonprofit private colleges graduate owing an average of $26,100. Then for students attending private colleges, the debt has grown 17% over the last ten years, after inflation.
“It’s easy for parents to get overwhelmed at the amount they’ll need to save. But college is the main area, other than a home mortgage, where it’s widely considered acceptable to borrow money. But to be on the safe side, make sure your student graduates with a debt load no more than half of what they can pay with their first year’s salary. For example, students with a starting salary of $30,000 should keep their debt at or below $15,000. They’ll then be able to dedicate 10% of their annual salary to school debt and can pay it off in five years,” Boldon advised.
Support from parents and grandparents can help students, but there are other options to consider as well.
“Grandparents can make annual contributions to a college savings account, which then has the added benefit of not being included on financial aid forms. But in addition to, or in lieu of that, students can also participate in financing some or all of their college education. Some parents use the 50/50 approach, where parents agree to pay one half, and children commit to the other. Students can then work hard in high school, with summer jobs, scholarships, and work-study opportunities, to get their half covered and stay out of the college debt trap.” Boldon recommended.
At RKB Accounting & Tax Service, Reginald K. Boldon specializes in helping business owners and individuals maximize the fruits of their hard work by minimizing their tax burden within the limits of the law. Give him a call (608) 782-6433, email firstname.lastname@example.org or visit his website http://lacrosseaccountant.com
- Contact Information
- Reginald K. Boldon
- Business Owner
- RKB Accounting & Tax Service
- (1) (608) 782-6433
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