Private College Costs Climbing at an Alarming Rate – July 19, 2013 Newsletter
According to a recent Wall Street Journal article by Glenn Harlan Reynolds, a Professor of Law at the University of Tennessee, college costs are climbing at an alarming rate. A staggering statistic cited by Mr. Reynolds is a growth rate of 7.45% per year in college tuition since 1978 which translates into more than a fourfold increase in 20 years.
Twenty-something’s today who plan to have children attending college in 20 years will be looking at annual private college tuition of $250,000, assuming 7.45% growth per year from today’s $60,000 level. A family with three college-bound children would need at least $3 million in 2033 to pay for four years of college. College tuition growth rates clearly are unsustainable. So to all the grandparents out there that often ask me about 529 plans or other ways to save for the grandkids education, it’s never too soon to start and feel the funds as best you can if you are concerned about your kids being able to afford to pay for their kids’ college. This stuff is scary!