Southern Comfort: College Planning & Visits

It’s a cliché to say how quickly kids grow up, but it’s rooted in some reality.  When a child is an infant, a parent’s clock slows way down.  Every movement of a new born is supervised and managed (especially the first born) to the extent a completely irrational being can be controlled.  As the child ages, the parent’s clock speeds up.  The next thing you know, you are taking your kid on college tours. 

In order to ease the kick-off of a college trip with our son, I made some accommodations.  One was making the early departure as easy as possible (see picture below), the other was to fib about the time of the early departure. 

There are not many teenagers who enjoy getting up early.  Mine are no exception.  With the promise of a comfortable bed and many hours of sleep, my son agreed to a 4:30 AM departure.  The funny thing is the difference between 3 AM and the promised time is not that great.   

Traffic on I95 South during Spring Break can be its own version of Dante’s Inferno.  The extra early departure was timed to avoid almost all traffic.  And it succeeded.  We flew down the highway and hit the border of South Carolina with little resistance.

My son’s initial criteria for selecting colleges including the following:

  1. Somewhere south of Maryland
  2. Large school
  3. Respected business program
  4. Affordability (more on that later)

This allowed us to compile an initial list of ~20 schools to consider.  This trip would encompass at least 2 of the top favorites and 1 unknown.  They are Clemson, South Carolina, and Georgia.  Clemson was an easy choice.  One of our closest friends is an alumnus and both their sons go there.  South Carolina has a great reputation in the Maryland area.  Georgia was added because of a long-ago business trip I had made to Athens. 

I won’t bore you with the logistics of the trip, other than to state we traveled ~1,400 miles between Monday and Wednesday.  Overall, it was a great start to my son’s college search.  He’s excited about Clemson and South Carolina.  For him, Georgia seemed far too isolated. 

Along the way, we engaged in a discussion of financing college.  He’s known for quite some time how expensive college can be.  He’s also aware of the college savings account I have been building for nearly his whole life.  We’ve also discussed alternative paths to reduce overall tuition expenses, including online courses, summer classes, work/study, etc.

With the existing savings account, potential grants and merit scholarships, it’s quite possible we can finance college without taking out loans.  This is significant.  This reflects no genius on my part other than maintaining the discipline to consistently contribute to his 529 Plan.  It’s estimated that 70% of college students are taking on debt to finance their studies.   

Here are some thoughts on financing higher education and different approaches:

  • My number one recommendation for college savings is funding a 529 Plan.  Contributions grow tax-deferred.  Withdrawals, if used for qualified education expenses, are federally tax-free.  Some states allow deductible contributions to 529 Plans.  Friends and family can make contributions.  Grandparents can be a significant source of funding if they are so inclined.  These plans are not strictly for 4-year colleges.  Vocational, 2-year college programs and even some K-12 expenses are eligible for funding from a 529.This is a collaboration with your child.
  • At an appropriate age, parents should have a realistic conversation with them about finances.  Will they be expected to contribute? How much? Starting when? Is that famous private school they have their eyes on simply out of the question? No one wants to quash any youngster’s dreams. However, if your B student is looking at a $60,000 per year private school to be an Art History major, it may be time to readjust expectations.
  • Not everyone needs or wants to attend a 4-year college.  If your child has a propensity towards mechanics, why force them into an environment where they won’t thrive? There are plenty of well-paying jobs in the technical fields.  In the end, everyone may be happier.
  • Judging by the numbers that wash out in their first semester, it’s clear not everyone is on the same page. (1 in 3 freshmen do not return for their sophomore year for a variety of reasons.)  Setting expectations is critical.  Better yet, teaching them how to be goal-oriented will go a long way to getting them to the podium. 

A note about goal setting: Have your student focus on the shorter-term goal of finishing their first semester, rather than the daunting task of completing 4 years.  This makes the goal more realistic and attainable.  Once, they learn this discipline, it can be applied to any task.  Intensity + Consistency = Results

Finally, if you are looking to see how much you need to save for college, there are several calculators available online.  If you are interested in a more personal calculation and discussion, specific to your family’s situation, contact me for a free college planning estimate. 

Please feel free to share with others and make suggestions for future articles: peter.oneill@fiduciamwealth.com