Some Thoughts on College Funding

By Glenn J. Downing, MBA, CFP®

As many of you know, I am a CFP instructor with Zahn Associates and have been for many years. Currently, I am reviewing the material for General Principals of Financial Planning, which I’ll be teaching soon. Part of that course is college funding.

In the context of the material, this section teaches the time value of money calculations. For example, if the client has a newborn who absolutely will be attending Harvard at age 18, how much new annual saving is necessary assuming 5% inflation and 8% earnings? Siri tells me that the full freight now is $78,200.

Ready for the answer? Sitting down? $18,743.42/year. Something most new parents can do, right?

I personally feel that if I have brought a child into the world, I have a responsibility to that child to give him or her the best start possible, and that includes a solid education. Yet college funding numbers look stratospheric. In this example, one year of college may very well cost more than one...

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