The cost of college is going up

Does it seem to you that the prices for everything are going up? Most people know about general inflation. That, as it increases the cost to purchase goods goes up and the value of money goes down.

We know that the Federal Reserve can increase or decrease interest rates to try to control the rate of general inflation. However, there is another inflation that most people do not think about.

It is Education Inflation!

While general inflation is going up, depending on the economist you talk to, at a rate 2%-5% each year Education Inflation is going up a rate of 8%-12% each year. Yes, as stated on our home page, some colleges, in 2004, had an increase of 37%.

What this means is that if a year of college tuition now costs, say, $8,000 and there is an Education Inflation rate of 10% the cost of that one year of college in ten years would be $20,750. Yes! WOW!

The real challenge for parents is to:

-Begin saving early. Even a little saved each month can add up if you have several years to save.

-Save in the best place. Know what kind of return you are really getting and know how it compares with education inflation.

-Be flexible. Stay on top of your savings plan and make immediate changes if your savings plan is not keeping up with education inflation.

-Keep informed. Know, for example, if there is a change in the management of a mutual fund your may own.

-Take advantage of inter college transfers, learn about departmental scholarships and if they are available.

-Is it necessary to attend an expensive college when another college may offer the same degree at a lesser cost? Remember, many famous people did not attend ivy-league schools and they did very well. Its what your child does with the degree, not necessarily where the degree was earned.

-Look for opportunities for your student to go to summer school. It reduces cost, reduces loan amounts and your student graduates earlier. They can then start earning money and use their education.

To help parents keep on top of the latest in college cost, education inflation and other important matters concering saving, planning and paying for college we suggest you subscribe to The College Planner Digest.

This monthly publication is a must for parents who are serious about gaining knowledge and staying informed about the college funding process as well as other important information that will assist them in the goal of providing a college education.

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