Even after a harsh winter that left many schools scrambling to replace missed snow days, most students across the nation have either started or are about to start their summer vacations. Many high school graduates are looking forward to starting their college careers, optimistic about their futures.
Yet for their parents, the looming costs of a college education present huge challenges. Over the past 10 years, the average price for tuition and fees at four-year private colleges and universities has jumped to $34,740 per year, up more than $7,000, according to statistics from the College Board. Those costs have outpaced the rate of inflation by more than 3 percentage points, continuing a troubling trend that has persisted for decades.
Data source: College Board. Chart by author.
High college costs have pushed up student debt levels, giving college graduates a financial hole to dig out of as they start their work careers.
Parents with younger students have the most time to use special accounts for college savings known as 529 plans. These accounts offer the potential for tax-free investment growth, making your savings go further.
For students with fewer years between now and high school graduation, one popular strategy has been to favor public universities over private institutions. That can produce substantial cost savings, with average four-year public universities charging $9,970 for tuition and fees. Yet even with those savings, students will appreciate whatever their parents can do to minimize the amount of student debt they have to take on.
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