Category Archives: Cost saving strategies

Community College as a Pathway to a Four-Year Degree

Community colleges are often promoted as a great way for students to start on the path to a four-year degree: they’re lower cost than four-year colleges and it’s more likely the student can live at home to save additional money. However, a recent study showed that while 81% of students entering community colleges aspired to a bachelor’s degree, only 14% actually earn one within six years of starting at a community college. In fact, only 1/3 of community college students in the study’s cohort even transferred to a four-year institution. Continue reading Community College as a Pathway to a Four-Year Degree

Late-Stage College Savings Strategies

One of the bigger frustrations about 529 plans that I hear from parents is their reliance on investments to fund college. In the early accumulation years, parents don’t like the seemingly large allocations to fixed income that many plans have. As college nears, parents’ fears tend to group around two risk factors: market risk, whereby you might lose some or all of your savings in a poorly-timed market downturn; and inflation risk, where a conservative investment allocation means your savings are losing purchasing power due to inflation. Continue reading Late-Stage College Savings Strategies

Finding Money

Of his two college choices, my son is leaning heavily towards the more expensive one. (Good news: it’s not as much more expensive as we had originally thought, but still around $4,000-$5,000 more for freshman year, including transportation– not exactly chump change.) We tasked him with finding some ways to bring his costs down and we’ve been pleasantly surprised with what he’s learned. Continue reading Finding Money

Planning for All Four (or More) Years

A friend whose son is my twins’ age was surprised recently when I told her some of the colleges my daughter was applying to. She thought they seemed unlikely choices given my constant messaging of finding affordable schools. Her son was interested in some of the same ones and the net prices they found were quite high. The answer: we have the benefit of two children in college all four years. That means our EFC gets divided between then and in many cases, this yielded lower likely net costs. Good news for my Continue reading Planning for All Four (or More) Years

Why 529s Always Make Sense

It’s easy to explain to parents of younger children why 529s make sense: Contribute now and your account grows tax-free for 18 years until college. If you live in one of the more than 30 states that offers a tax deduction, that’s an even bigger incentive. Here in Oregon, for example, we get a tax deduction for the first $4,865 in contributions to the Oregon College Savings Plan. If I contributed that much for my newborn (well, they act like newborns sometimes) I’d get an immediate return of 9% (state tax rate) or $437.85. Suppose that my account then grows for 18 years at 5% (I’m drastically simplifying the math here), I’d have almost $12,000 when my child was ready to start college, and no tax bill to access it. Added bonus: the FAFSA and Profile don’t count that gain as income in their formulas, unlike how it would be treated if it were in a taxable account. Continue reading Why 529s Always Make Sense

College Endowment Returns

If you’re still smarting from your year-end 401k statement, you might not want to read this. The 2018 NACUBO-TIAA Study of Endowments showed that even institutional investors were not immune to market performance, with endowment returns down almost 1/3 from 2017 to 2018. Endowments still managed an average return of 8.2%, though the 10-year average annual return came in at 5.8%, short of the 7.2% 10-year return target. Continue reading College Endowment Returns

Budgeting for Books and Supplies

When comparing the two schools my son is considering, we noticed an interesting data point: one school estimated books and supplies to cost $800 annually; the other $1,146. One of the schools my daughter applied to estimates $1,800. While I can certainly understand that different meal plans or living options might be more or less expensive at different schools, it’s hard to understand why books would cost 50% or 100% more from school to school. Continue reading Budgeting for Books and Supplies