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Predicting college tuition...
Old 06-14-2007, 09:34 PM   #1
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Predicting college tuition...

I'm not married...yet, and don't have any kids, but I'm wanting to start looking into college investing. Does anyone have any good information on this? My big question is what the prediction ya'll might have about college costs (in-state) around the year 2025 or later.

I'm thinking an initial investment of $5k at birth, then $1k per year after that (18 years of investing) per kid wouldn't be a bad start? Especially if I can get about 12%?
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Old 06-15-2007, 07:12 AM   #2
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I have seen predictions that say tuition and other associated college expenses (room, books, etc.) will likely triple in 18 years.

In Florida there is a prepaid plan. To make a long story short, rather than invest the money yourself, you "lock in" at today's rates by agreeing to pay for your child's college now. You can pay one lump sum of $11,500 (Florida in-state tuition for four years) or spread that out over several years . If your child doesn't go to college, you can either a) transfer it to a sibling or b) get your contribution back. Many other states have these as well and you can transfer this account to hundreds of schools not in your state. Granted, they will only pay to that out of state school the amount that your child would've received staying in-state. But the good thing is that if you move sometime during the child's life, you're not stuck having to send them back to Florida (or whichever state) to receive this. And if you're in-state in, say, South Carolina, your Florida prepaid plan will likely be similar and you won't pay anything additional. Hope that makes sense.

I haven't signed up for this yet. I'm thinking really hard about it, though. Check to see if your state has one similar and see what you think.
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Old 06-15-2007, 09:46 AM   #3
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Cowboy, college tuition and fee will most likely rise much faster than inflation. In the last ten years, the average annualized increase is about 13%.

Not sure about room & board, but I think the rate is much lower, though still higher than inflation.

Edit: That Florida plan is a real bargain! Why is it so cheap?
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Old 06-15-2007, 10:26 AM   #4
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Sam,

Florida tuition is very cheap in-state currently. That could and probably will change, which is why locking now is a really good deal. If anyone is interested in reading more about, check it out below. This the price for a one year old child:

Florida Prepaid College Plan
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Old 06-15-2007, 11:32 AM   #5
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Originally Posted by GatorBuzz View Post
Sam,

Florida tuition is very cheap in-state currently. That could and probably will change, which is why locking now is a really good deal. If anyone is interested in reading more about, check it out below. This the price for a one year old child:

Florida Prepaid College Plan
GatorBuzz,

I looked again, the price listed can not be locked at this moment. They are going to announce the new price in the fall. I hope the new price will not be too much higher than the current one.

Do you know the actual price for last year?
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Old 06-15-2007, 11:44 AM   #6
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If I understand your question correctly, it is locked in depending on your child's age. Here is a listing of all the prices by the age or grade your child is in:

Florida Prepaid College Plan


If this is not what your question is referring to, I think you must be asking about the line at the top relative to "Fall Prices". I do know that there was a bill in the Florida legislature that would raise tuition $500.00 dollars a year (or maybe semester), but Governor Crist vetoed it. Maybe that is what you're referring to? But aside from that, the prices go up nominally every year, sometimes by a hundred (or even less) or so and sometimes by a couple hundred, but NEVER more than that...yet! Even with a hundred or two increase in the Fall, it's still a good deal...
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Old 06-15-2007, 11:49 AM   #7
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Originally Posted by GatorBuzz View Post
If this is not what your question is referring to, I think you must be asking about the line at the top relative to "Fall Prices". I do know that there was a bill in the Florida legislature that would raise tuition $500.00 dollars a year (or maybe semester), but Governor Crist vetoed it.
Yes, that's what I am talking about. So you think it will only increase by a few hundred dollars?

How long has this plan been around, do you know?
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Old 06-15-2007, 11:55 AM   #8
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It has been around since 1987, so it's been used for quite a few years.
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Old 06-15-2007, 12:43 PM   #9
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I looked into this recently for University of North Carolina system schools. For tuition+fees, the rate of increase for the last 5-10 years was 7%. Room and board I would expect to increase at approximately the rate of inflation.
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Old 06-15-2007, 01:20 PM   #10
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I looked into this recently for University of North Carolina system schools. For tuition+fees, the rate of increase for the last 5-10 years was 7%. Room and board I would expect to increase at approximately the rate of inflation.
Good point, Justin. I need to clarify, the 13% increase is for Texas, specifically, UT Austin.
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Old 06-15-2007, 03:00 PM   #11
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The College Board (the folks who do the SAT) publish a document every year that has a bunch of statistics. I look at it to figure out what # to plug into my planning spreadsheet. I use average tuition and fees and room and board at the average 4 year college and the historical rate of increase, which looks like $12,796 per year and inflation plus 2.1%.

Here's a link to their 2006 report:

http://www.collegeboard.com/prod_dow...pricing_06.pdf


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Old 06-16-2007, 10:50 AM   #12
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Your best college plan would be to marry a really smart girl and hope her DNA allows your kids to get merit scholarships. After you have raised them right, so they don't get off track in the many familiar ways even smart kids do. As a fall back position, do your darnedest to work smart, invest wisely and stay married so that your savings and investments will be available to fill any gaps.
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