BOSTON (CBS) – The annual return of college students has begun. Cars loaded with kids and their stuff have been emptied out all over Boston. Classes have started and in order to start money has exchanged hands. Lots of money! Much of it borrowed.
So I thought we would spend the week looking at ways to save for college. The cost for college is staggering and according to Fidelity is doubling every nine years.
According to a Fidelity study, saving for college has reached an all-time high with 69% of families currently saving. Sounds really good, but they still have some work to do on the savings front, as they are currently on track to save just 27% of their college funding goals by the time they drop the kid off on campus. Seventy percent of Millennials have begun to save for their kids’ education.
So how much does it cost?
Harvard’s tuition for this year is $43,000 and the room and board is almost $16,000 ($15,951). They estimate miscellaneous fees, books & personal items to be another $8,000. That’s $67,000 without adding the new computer or travel. The sticker price for four years at Harvard could be well over $320,000.
The average Massachusetts private college education price tag is well over $250,000 for four years.
Tuition at UMass for this year is almost $15,000 ($14,600). Room & board almost $12,000 ($11,800). A price tag of about $125,000 for four years.
College expenses have averaged an increase of about four percent a year. Which sounds almost reasonable but in the Fidelity study they are predicting 8% a year. And the fees are worse than the airlines. According to MarketWatch, over the past few decades the cost of college textbooks has skyrocketed 945%, compared with a 262% increase in the consumer price index during the same period.
I strongly believe an education is a good investment! But the investment is in the kid so they should be part of the planning and the paying.
Kids need to be a part of this process. And they should have a job over the summer to earn money for school. They can easily be responsible for their spending money, clothes, entertainment, books and some of the fees depending on the job they have.
When getting a degree kids should consider a marketable degree, something that will get them a job upon graduation.
So I am safe in saying college will be more expensive in the future, so that will need to be part of your planning.
According to the New York Times, last year Americans with four-year college degrees earned 98% more per hour than workers without degrees.
One more thing: According to Harvard’s website 90% of American families would pay the same or less to send their children to Harvard as they would a state school. So if you have a bright kiddo fill out that application for Harvard.