The average costs for one academic year for college tuition and fees, room and board, plus some other expenses such as books, was $60,420 at a four-year private institution and $28,840 at a four-year public, in-state school in 2023–2024.* That’s $241,680 to attend private college full-time for four years or $115,360 at a state-subsidized college or university, based on the College Board’s most recent Trends in College Pricing and Student Aid 2023.
Of course, the overall cost for college depends on many variables, ranging from school type and location to full- or part-time study, program of study and any degree changes, if a study-abroad or domestic study-away program is part of the plan, as well as whether it takes four years or more to attain the desired degree or degrees.
Like with any financial investment, planning ahead is critically important. Advance planning is especially key to help avoid joining the ranks of student debt holders. The outstanding U.S. federal loan balance was $1.62 trillion—24% of which was held by borrowers age 50+, according to the College Board’s 2022 report.
So, whether you are looking to earn a degree in the near future or you are planning far ahead for the educational pursuits of children or grandchildren — born already or not — your financial advisor is a good place to start.
They can help you wade through the many options available to meet your funding needs. Some of the tools to help with educational expense planning, include:
- The development of an integrated plan, such as the RBC WealthPlan
- Savings accounts like the RBC Cash Management Account
- Custodial accounts like the commonly known 529 savings plan
Utilizing a 529 plan for education is an option that’s not subject to U.S. federal tax when used for qualified expenses.
Also, under the SECURE 2.0 Act Roth rollover provision, 529 plan owners may roll over funds not used for college tuition into IRA accounts for retirement.
Scholarships, grants and financial aid programs are funding options worthy of exploration as well, but they are not guaranteed and they are based on various criteria and have separate application processes.
Some individuals and families find educational consultants helpful in navigating the college preparation, application and admission processes. For client ease and a value-add, RBC Wealth Management has established a relationship with third-party vendors who offer educational consulting. Your financial advisor can provide additional information and a referral to receive the discounted rate.
So regardless of whether the dream is to study AI, obtain an MBA or become a doctor, your financial advisor is prepared to work with you, an educational consultant or other professionals, to help you and your loved ones achieve goals and fulfill dreams.