Financial Planning > College Planning

Spend Wisely and Lower Your Expectations

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Fred Amrein of Amrein Financial in Wynnewood, Pennsylvania, is one of the advocates for wise spending. “One of the things that makes us really different,” he says, speaking of his firm, “is that we show parents a four-year cash flow.” Parents are becoming more aware of the high cost of college, he says, after a “euphoria” in which money was cheap and the emotional side ruled. Now people are turning to their practical sides.

Parents are starting to consider such economy measures, he explains, as sending kids to state schools. They’re also starting to think about what the kids will actually get out of their educations–both career-wise and debt-wise. Since he’s starting to see “wage deflation” because of unemployment, with people making anywhere from 30% to 60% less, they’re also more likely to seek out financial aid. Amrein says that there is much more information about college funding, including webinars and webcasts, posted on the company site; much of the information was scheduled to go live in July. See for more information.

There are many other factors to consider, such as sending the kids to community or public college for a couple of years or, as planner Emery suggests, having the child start early on academic measures to save on tuition, such as taking advanced placement (AP) courses and sitting for the exams. “I’ve seen people who can audit out of close to a semester of school,” he says, but “you have to start that track early. You can’t come in in senior year and do it all.”

Most of the planners we spoke with advocated having children pay at least part of their own tuition, perhaps a third, through jobs (including, says planner Thomas Scanlon of Borgida & Co, working as a dorm resident assistant to save housing costs). It gives them a sense of what their education will cost. In the case of a student video game designer whose parents owed so much in tuition (see opening anecdote on page 28), advisor David Blain encouraged the parents to get him to understand that this was his debt, too. The boy got a job, although not in the video game field, and is now contributing to paying it off.