Preparing for College

An education for your child is a sound investment in their future.

A college education continues to be one of the smartest investments you can make- for you and your children. College enriches a young person’s life in many ways, generating important intangible benefits, new ideas, broader experiences, cultural awareness and self-confidence as well as the tangible ones that accompany higher earning power. It needs careful consideration and preparation that exceeds joining extracurricular activities and boosting their GPA.

Preparing for college financially should begin before your child greets you waving their college acceptance letter. It is a time for joy and celebration. They are starting an exciting and opportune stage in their life and there is no room for panic and financial stress. Preparation should start at the first baby step and it should be maintained to overcome the possible bumps and detours down the road. Don’t leave room for surprises, at least not the scary ones.

The cost of tuition alone increases significantly every year. Add room & board, books, and living expenses and you’ve got a full package. Whether it is a public or private institution, helping your child through these important years shouldn’t break the bank. It is best to be prepared for the ever-changing trends in tuition costs and the safest way is to think ahead.

While most parents realize the value of a good education, helping their children pay for college is a different matter. Currently, tuition costs are increasing greater than the rate of inflation, making sound college savings strategies all the more important.

There are three main ways to pay for college:

  1. Grants and/or Scholarships
    Financial grants are an unpredictable source of funds. Grants are usually based on financial-need tests that exclude many middle-income families. Also, it’s difficult to know whether or not your child will be eligible for scholarships in the future.
  2. Loans
    Banks, civic organizations, colleges, and federal and state governments sponsor loan programs. There are, however, two main drawbacks to borrowing for college: The amount of the loan is limited by the family’s (or the student’s) ability to repay, and the loan (plus interest) becomes a long-term financial burden.
  3. Family resources
    This category includes personal savings by students, parents or other family members.

Do Your Homework

Detailed information about private and public college tuition, financial aid options, available scholarships and college planning calculators are available at your fingertips. Some help online resources:


Determining the anticipated coast for your children’s college education will help you develop a successful saving strategy. Your advisor can help devise a strategy that’s right for you and your family.

Get started today. Contact your North Star Resource Group financial advisor.


A 529 college savings plan is a tax-advantaged investment program designed to help pay for qualified higher education costs. Participation in a 529 plan does not guarantee that the contributions and investment returns will be adequate to cover higher education expenses. Contributors to the plan assume all investment risk, including the potential for loss of principal, and any penalties for non-educational withdrawals.

Your state of residence may offer state tax advantages to residents who participate in the in-state plan, subject to meeting certain conditions or requirements. You may miss out on certain state tax advantages should you choose another state’s 529 plan. Any state based benefits should be one of many appropriately weighted factors to be considered in making an investment decision. You should consult with your financial, tax or other advisor to learn more about how state based benefits (including any limitations) would apply to your specific circumstances.  You may also wish to contact your home state’s 529 plan Program Administrator to learn more about the benefits that might be available to you by investing in the in-state plan. 661102 / 05-2013