The cost of higher education is increasing year after year, running well ahead of inflation. At some prestigious private colleges and universities, the cost of one year's education, including room and board, can be in excess of $32,000 (Source: Trends in College Pricing —2007, The College Board). At these prices, the final cost of a bachelor's degree can be upwards of $130,000. And, with many professions requiring graduate degrees, it quickly becomes apparent that very few families may be able to cover education expenses out of their current incomes. With only one child, the costs can be prohibitive; for families with three or more children, college and graduate school costs could easily reach —or exceed —$500,000.
How can a family build a fund for college? They need to look ahead and prepare a "blueprint" as early as possible, and there are a number of ways to do this. The best method will depend on the age of the child, the family's resources and cash needs, and a number of other considerations.
Most importantly, any plan for education funding must be coordinated with a family's overall financial strategy.