College Savings

By:  Kaitlin Schaeffer Yardley, CFP®

Published: May, 2022


They say, “don’t blink.” Before you know it, that cute Kindergartener carrying an oversized backpack filled with art projects, will be heading off to college – complete with a hefty tuition bill plus room, board, and book fees. Psychologists have many strategies for coping with that process emotionally, but for now, let’s focus on how to handle the financial cost.

  • Be realistic about what you can afford. While we have all watched the price of universities skyrocket over the last few years, that doesn’t mean we have to pay those exorbitant prices.   Actively look for a college based on your budget – not how successful their football team is or how impressive the new dorm buildings with en-suite bathrooms. 
  • Start saving sooner rather than later. While it seems impossible to imagine your toddler brushing their own teeth, let alone graduating from high school – the day will come and you’ll wish you had saved sooner. Make setting aside something a priority each month, even a small amount is helpful. The more you invest now, the more it will compound over time.
  • Use a 529 Plan. These tax advantaged accounts were originally designed to be used for higher education costs. Earnings grow tax deferred and distributions used on qualified expenses are income tax free. If you are so lucky to have excess funds, the beneficiary can be transferred to another qualifying family member. And, as of the recent tax law change, these funds can be used for just about any educational expense, including pre-school and beyond college. 
  • Talk to your kids about college costs. Will they pay a portion of the bill? Don’t wait until all the acceptance letters arrive to figure out who is paying what. This conversation should happen before they even apply. Share with them how much you have saved so they can make an informed decision – not an emotional one – about their own contribution.
  • Pay your own debt first. The national average student loan debt is close to $30K. If you still have student loans, you need to take care of yourself before taking on additional debt for your child. Explain how and what your own student loan debt might be holding you back from, so the next generation doesn’t get stuck with that cost too.
  • If the savings you have set aside aren’t going to be enough, research the numerous programs available to help cover the cost. Know the difference between grants and loans and make sure you fill out the applications early. The process can be daunting, but slow down and do the work – and the cost of your time will be rewarded.


Kaitlin Yardley is the Chief Compliance Officer for Schaeffer Financial, LLC, a financial planning consulting firm located in suburban Washington, D.C. She received her CFP designation in 2008 and earned a B.A. in Finance from the University of Dayton in 2003. Kaitlin has been advising clients for over 10 years and has been conducting webinars for the National Institute of Transition Planning since 2017.

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