$500,000
In the course of an intriguing and engagingly written piece in today’s New York Times about how it might make sense for you not to save for your children’s college education, we find the following statistics:
[T]he cost of an education at a top four-year private college [has risen] to more than $160,000. State universities, where tuition has been rising at a faster pace than for private schools, can cost $110,000 to $140,000 for out-of-state tuition.
"The numbers are really staggering," said Rich Calvario, national finance tuition consultant at TIAA-CREF, one of the nation's largest money management firms.
Parents can count on the costs growing. In 18 years, the bill for a private college could easily hit $500,000, according to online financial calculators created by Raymond James planners. To get there, you would have to save $1,000 a month and have it earn 7 percent a month from the day Junior was born. Tuition, which has been rising faster than inflation for two decades, is now also rising faster than the median family income of $44,389.
The factors that have pushed it to rise annually more than three percentage points above inflation - demographics, reductions in state aid to higher education, the demand for college education - are not changing, says Ronald Ehrenberg, a Cornell University economics professor.
There are many other factors, to be sure. Personal chefs for university presidents do not come cheap.
But ultimately there’s the simple willingness of American parents to pay these prices, even as they become more and more staggering…
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