In today's world a university education is a prerequisite for getting ahead in any career, but the costs associated with sending your child to school are extremely high. Many parents borrow money to pay these high fees, especially if they are sending their children to a private school rather than the local state-run institution. The average four-year private college charges $22,000 per year for tuition, compared to $5,800 for the same four-year program at a public institution. That's quite a difference: $65,000 to be exact. Is it really worth the extra money?
That's the wrong question to ask. It's important to remember that your child getting the best education possible will lay the foundation for success once they graduate. It shouldn't matter what the cost is but rather what the benefit will be from attending a particular university. Studying at an Ivy League school is never a bad thing. Harvard's graduation rate is an impressive 97 percent. If your child is an elite student, getting accepted to a school like Harvard is an accomplishment in itself. Chances are good they'll succeed once they've graduated and moved on to the working world.
The real question is: how are you going to pay for it? With tuition fees climbing steadily and with so many other expenses to worry about (retirement savings, mortgages, credit card bills), it's easy to stick your head in the sand and ignore your college-aged child's looming tuition bills. The trick is to treat your kid's college fund as any other kind of investment or saving. You have start early, be persistent and choose your investments wisely.
Saving for your child's education is no different than saving for retirement, except for the time frame you'll have to do so. The average age of a parent with a college-aged child is between 45 and 50. If you started your savings program right after the birth of your child, you'll have had 20 years to pay for college. That's about half the time available to grow your retirement savings. With less time, you'll need to make your investments count.