CNNMoney.com reported today the average cost of a four-year private college is now $30,367 annually. The average tuition at four-year public colleges and universities slowed for the third consecutive year and now sits at $5,836 annually. The College Board reports that college costs have risen faster than the rate of inflation for eleven consecutive years now.
And don’t forget, these are just the tuition costs. Little Johnny and Jenny will need a place to rest their respective heads, an occasional meal and perhaps a textbook or two. Room and board alone now averages $8,149 for private schools and $6,960 for public schools.
Is it worth it? The College Board reports that in 2005, women aged 25-34 with a bachelor’s degree earned 70% more than those with high school diplomas. For men, the difference was 63%.
So what are parents to do about rising college costs? There are many options available including grants, scholarships, student loans, 529 plans, home equity loans, etc. An often overlooked source of college funding is a life insurance policy. Many permanent type (e.g. Universal and Whole) life insurance policies build cash values which may be tapped for college expenses (check with your CPA or tax planning attorney for tax implications).
A final consideration for the steadily increasing cost of college is to plan ahead and purchase an adequate amount of term life insurance. Whether it’s Stanford University or the local community college, term life insurance can help ensure that Johnny and Jenny can continue their education, new textbooks and all.