College costs money, and it continues to increase. The actual price that you pay is difficult to understand because it has become progressively more expensive for those that have more financial resources—especially physicians who have or plan to have children in the future.
In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks to Joe Messinger about how college costs work and how to start planning sooner than later. Joe is a Certified Financial Planner, CFP®, and Founder of Capstone Wealth Partners and College Aid Pro.
Topics Discussed:
- Tuition Costs: Different levels for in- versus out-of-state students
- 3X or Greater: How college costs have changed in the past 20 years
- Why? Supply and demand led to out-of-control costs for college
- Inflation: State colleges level off, but private colleges continue to increase costs
- Price Transparency: Private colleges equate value to higher or discounted costs
- Analogy: College cost is similar to medical bills because it’s different for everybody
- College Funding Philosophy: Best way to pay for college is to save for college
- 3 Key Financial Aid Components:
- Family’s finances
- Student’s academics
- School’s business model
- High-income Hurdle: Family finances impact student’s ability to get financial aid
- Sticker Price Shock: Some schools give money for merit, not just for need
- Budget: Use school’s money first, then federal aid, and set limitations
- Rule of Thumb: Save for one-third, pay for a third, and take out a third in loans
- College Aid Pro: Changing the way America shops smart for college
Links:
Can a 529 Plan be Applied to a Student Loan?
Free Application for Federal Student Aid (FAFSA®)
