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What College Funding Options Exist?

Updated: Jul 11

Attending college, for the most part, continues to be highly encouraged in order to find a good job and increase lifetime income but the price tag continues to rise each and every year. How much is a standard year of college, you ask? A public four year education is estimated around $10,000 per year, not including room & board which more than doubles that figure according to With the tuition inflation rate at double the normal inflation rate (as measured by the Consumer Price Index), it’s no surprise that parents feel the stress and pressure weighing on them.

The good news is that, if you choose to financially support your child’s education, there are no lack of solutions out there to help. The challenge is knowing which solution is best for you. This post isn’t intended to determine the best option for you but to give you some details of the options available to help you make an informed decision. Below are the advantages and disadvantages of each option. There are a few other vehicles such as using a Roth IRA but since the primary objective is retirement, we haven’t listed it here.

The common vehicle that is often recommended is a 529 due to its tax advantages, ability for growth, and lack of restrictions. I would caution that if you’re unsure of whether your child will attend a school that qualifies under a 529 and there aren’t any other beneficiaries you could change it to, that it may make sense to split the college savings between a 529 and something like an UTMA giving some flexibility with the funds in case the beneficiary doesn’t choose a higher education path. With recent changes in Secure 2.0, there is new legislation that allows a certain lifetime amount ($35,000 as of 2023) to be converted to a roth ira so the attractiveness of a 529 continues to increase.

Consult with a financial planner to discuss your specific situation and which option is right for you but hopefully you can have a better understanding of many of the options when it comes to college funding.

Photo byElement5 DigitalonUnsplash

The author, Maddi Napier, CFP®, MBA, QKA, FSRI is the founder and financial planner at Minerva Wealth Planning. If you have any questions or would like to get in touch, email

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