A quick glance at the tuition page of a favorite college or university’s website is enough to give parents or grandparents sticker shock. Tuition has grown faster than inflation for more than two decades, long to enough to drive the average annual cost of a public four-year college in 2018-2019 to $10,230 for in-state tuition only and the average annual tuition cost for a private college to $34,9201.
So how much does a child really need in his or her 529? The Magic Savings Number depends heavily on how much tuition and eligible expenses the plan owner hopes to pay for from the account and how old the beneficiary is. A good college calculator, like this one at the College Board, can give owners a target to save toward. Keep in mind these projections can be daunting, but don’t let them discourage you. Relatively few students pay the full “sticker price” and there are other financial resources available, such as scholarships, loans, grants, and other forms of financial aid.
Don’t underfund your 529 plan and be unpleasantly surprised in the future. Speak to your CIG Capital Advisors wealth management professional or schedule an appointment to talk with a financial advisor about how to plan for your college savings goals.
1 The College Board, https://trends.collegeboard.org/college-pricing