Financial Planning for College
Saving for college education generally comes in at the top of the list for most families’ financial planning priorities. With annual higher education expenses on pace to hit six figures by the time your newborn or toddler becomes a high school senior, paying for college may seem impossible—unless you start financial planning for college right now.
Preparing to pay for higher education isn’t as simple as starting and contributing to a college savings plan. You’ll also need to figure out:
- Which colleges you and your child can afford
- How much financial aid your child may receive
- What your child’s (and possibly your) student loan burden may be after graduation
As tuition has historically outpaced inflation, the earlier you start college planning, the better. With so much at stake for your children’s education and future, many partner with a fiduciary financial advisor to estimate future college costs, walk you through the financial aid application process, and provide guidance on various tax-advantaged college savings options.
Key college financial planning questions a qualified advisor can answer
- How can I realistically estimate what my children’s future college costs will be?
- Will a 529 College Savings Plan, Coverdell Education Savings Account, custodial account, Roth IRA or a combination of these college investing options make the most sense for my family?
- How much should I contribute to these accounts each year?
- Should I limit my 529 College Savings Plan choices to those offered by my state?
- What should my children and I do to increase their chances of receiving financial aid?
- Other than private parental loans, which borrowing options should I consider to help pay for out-of-pocket college expenses?
- How do I find resources where my child can apply for non-needs-based scholarships and grants?
College Planning Challenges
How a financial advisor can address your challenges in paying for college
Serving as your financial advocate, your financial advisor in the Wealthramp network works directly for you. After gaining a full understanding of your financial picture, they’ll develop a comprehensive financial plan for affording college that includes:
Don’t leave college planning to chance
The biggest college financial planning mistakes
Failing to start saving for your children’s future college costs as early as possible
Overestimating the amount of financial aid and scholarships your children will receive
Underestimating the percentage of your children’s annual college costs you’ll have to pay out of pocket
Assuming that your parental income will disqualify your child from receiving financial aid or scholarships
Sacrificing your own future financial security by helping to pay for college with early withdrawals from your IRA or loans from your 401(k) plan account
Sending your child to an expensive private college when a public school could offer the same quality of higher education at a significantly lower price