Thursday, August 25, 2005

Saving for college

pfBlog has an interesting series of posts about saving for your childrens' college. He does a good job covering all of the options, though my conclusions about where to save differ a little from his. (I have one third of my savings in a prepaid tuition plan, and the other two thirds in 529 savings plans. The prepaid portion is in my oldest daughter's name so that it can be used by her younger sisters if she doesn't qualify, such as if she goes to college out of state.)

Parents thinking about their childrens' college would also be well-served to read Ric Edelman's advice on the subject; namely, think hard before sending your kid(s) to an expensive school. College should be viewed as an investment, and you should carefully consider whether the additional expense of Harvard instead of State U. makes sense. As an aside, a study I once read showed that while Ivy League graduates do earn more money, so do people who were admitted to Ivy League schools but did not attend. In other words, the kind of people who would attend Ivy League schools tend to earn more, regardless of where they go to college.


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