Paying For College

In the last twenty years, the cost of a college education has increased at more than double the rate of inflation. In some Ivy League schools, alumni children are literally paying more for one semester's tuition than their parents paid for four year's tuition thirty years ago.

If you start an educational funding investment plan when your child or grandchild is an infant, it will be much less of a strain on your finances. To begin formulating your investment plan, you need to calculate how much it will cost and how much you will need to invest (either in one lump sum or annually). Most major brokerage firms have computer programs designed to determine the cost for college educations for up to four children in a family. These programs usually have a selection of 1,700 or so colleges and universities, heir associated four-year costs and historic annual increases.

A growing number of people have postponed starting a family until they were in their 40s. Instead of funding their retirement plans, they are now paying college bills and may also be providing support for elderly parents.

Although it can represent a financial challenge to fund a child's education, most people realize the importance of doing so: studies have shown that a college education can help boost lifetime income by $1 million.