By Brandon Miller–
My twin boys will be entering the 6th grade this month. If you are a parent like me, you know time has no meaning once you’re with kiddos. Part of that is the infectious youth and wonder when you view the world through their eyes. There is also the unforgiving march of time that forces you to let them fly and be the wonderful free spirits you want them to be even if it may feel too soon.
Somewhere in the middle of that journey, the time comes to consider higher education. Now, not everyone wants to go to college and that in and of itself is a huge decision. But it’s better to save for the possibility of some sort of further education or training if you can. It’s the gift that will reap huge rewards for you and your loved ones.
If college is on the horizon, let’s assume that the cost will continue apace. Student loan forgiveness is far from a surety, and while things could change, you need to be prepared for cumulative costs of a traditional four-year college degree.
How bad is it? While the numbers vary depending on whether you attend a public or private university, or in-state or out-of-state institution, the data are sobering.
The average cost of college is $38,270 per student per year, according to Education Data Initiative, a team of researchers that collects data and statistics about the U.S. education system.
The average in-state student attending a public four-year institution and living on campus spends $27,146 for one academic year, or $108,584 over four years. The average cost of in-state tuition is $9,750 per year; out-of-state tuition averages $27,457. Out-of-state students pay an average of $45,708 per year or $182,832 over four years.
The average private, nonprofit university student spends $58,628 per academic year living on campus, including $38,768 for tuition and fees. It is not surprising that the average cost of college has more than doubled since 2000. That may be one reason why college enrollment peaked at 21 million in 2010 and gradually declined to 18.9 million in 2023, according to Statista.
So, first up: it’s time to review your savings accounts and funds set aside for this very purpose. Do your kids have any 529 accounts? Money earmarked from Grandma and Grandpa, savings from their part-time gig?
The next step is to consider federal aid or FAFSA. FAFSA, or Free Application for Federal Student Aid, is a free form you can submit online or by mail to apply for financial aid. The 2025–26 FAFSA is expected to be available on October 1, 2024.
Why FAFSA? Every year, the Department of Education awards billions of dollars in financial aid to college and graduate students via grants, loans, work-study programs, and scholarships. If financial assistance is required, this form must be submitted. In order to continue receiving aid, it must be resubmitted every year.
The early bird gets the funds, as financial aid is distributed on a first-come basis, first-served basis. When the money runs out, well, it runs out. In addition, aid from schools may have earlier deadlines than federal financial aid, so don’t delay.
Look into scholarships. There are athletic, academic, extracurricular, and student-specific scholarships. Some of these include identity-based scholarships, legacy scholarships, religious scholarships, and first-generation scholarships. Other scholarships include need-based scholarships, employer scholarships, STEM scholarships, and military scholarships.
Are you a member of a national club or a church? Are you members of a union or civic organization? Many of these groups offer scholarships to members and their children. The Rotary Club, Kiwanis Club, Chamber of Commerce, local churches, and foundations may offer scholarships based on a variety of factors and needs.
Local scholarships are usually funded by community organizations and businesses that want to see their local students thrive. Besides, there’s often less competition for these scholarships.
Not sure they are ready for full time school? Is there some sort of growth-focused experience that would be just as, if not more, beneficial for them? The Peace Corps may sound retro, but it’s still a thing, and more and more high school grads are taking a Gap Year to figure out what’s next.
It’s an exciting and a stressful time. Keep the lines of communication open as you look ahead. Just remember, you were once on this precipice of adulthood, so go easy on them. But guide them, just like you have these last 18 years.
The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always, please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.
Brio Financial Group is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.
Brandon Miller, CFP®, is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals. For more information: https://www.briofg.com/
Money Matters
Published on August 22, 2024
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