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Think You’ll Send Your Kids To College?

Making Sure Your Savings Doesn’t Fall Short


Ellicott City, MD. – A current College Board Annual Survey of Colleges revealed that the cost of a university education keeps going up, a lot more quickly than the prices of grocery stores and health care services. Over the last many years, in-state university fees and prices at public four-year universities went up yearly by 5.6 %. The average total expenses for a public in-state four-year college range from $65,000 to $90,000. CPA and tax expert John S. Curtin offers some advice.

Now it’s true: most students do not pay full price for college. Grants are the most desirable because students are not saddled with a repayment strategy after university.

People four-year university students graduate with a standard of $19,800 in financial obligation; their non-profit personal college counterparts graduate owing $26,100. In addition, an increasing percentage of all college debt is unsubsidized and starts accumulating interest instantly.

Students will have to make smarter education choices. Much more students are most likely to begin their education at lower-cost community colleges, and finish a four-year degree at schools that specialize in their concentration.

New parents who are able should promptly start putting away $430 a month for university. A one-time $50,000 financial investment must cover university fees, costs, room and board at an in-state university 18 years from now. Yes, this is quite frightening. But there are various other alternatives...

The assistance of grandparents can help tremendously. The huge majority of the college accounts that I’ve seen are possessed and funded by grandparents. As opposed to buying the most up-to-date gizmos for their grandchildren, they make yearly supplements to a university savings account. If the grandparents own the account, it has the added advantage of not being included as a source on the student’s financial aid types-- and that is a lovely advantage.

Giving a child the gift of a college education and learning and a debt-free beginning to their adult years is one selection. Other parents believe their kids should participate in financing their college education and can use the 50/50 cost savings technique. Parents commit to paying one-half of the money needed, and their kids commit to the other half. Students get involved by working hard in high school, obtaining scholarships, taking summertime tasks, seeking work-study opportunities and approving sensible financing levels.
Curtin offers some consolation, “Parents might feel overwhelmed concerning the amount they have to save for university. College education is one of the two life-time financial investments for which we authorize obtaining money (the various other is a residence mortgage). Students ought to prepare to graduate with a debt load no higher than fifty percent of what they can fairly expect from their first year’s salary. For example, those with a beginning wage of $40,000 must continue their financial obligation at or listed below $20,000. Therefore graduates can easily commit 10% of their yearly income to school financial obligation and pay it off in five years.”

 “Lastly,” says Curtin, "I’m not a stocks advisor; however, just from a planner’s viewpoint-- I do NOT recommend to our customers that they spend their education savings in pre-paid college tuition plans. At best, these usually tend to match university rising cost of living, and if made use of at an out-of-state institution, returns are based on money market rates, which are terribly reduced right now.”
John S Curtin CPA Chartered offers tax services to individuals and small businesses. He enjoys helping individuals and families save money on taxes. Give him a call (410) 203-2201, email or visit his website


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