Brenda and Mike Lipscomb relocated from New Jersey to Maryland in 2007 for better employment opportunities. In 2008, the couple moved again, this time to northern Virginia for better post-high school educational opportunities for their sons, Michael, 16, and Miles, 12.
â€śWe moved to Virginia primarily because our oldest son wants to attend Virginia Tech. He has his heart set on that school,â€ť says Mike, a plant manager at Science Applications International Corporation (SAIC) in Sterling, Virginia. Brenda, a sales manager for Daiichi Sankyo Co. Ltd., adds, â€śWhen we were looking at living in Maryland and Virginia, Maryland didnâ€™t have a lot of options. Virginia has so many schools.â€ť
At todayâ€™s tuition rate, the couple figures theyâ€™ll need $80,000 to pay for a four-year public education. The total cost for one year for in-state students is estimated at $17,365 compared with $31,336 for out-of-state students.
The Lipscombs have been aggressively saving since Michael was in third grade, initially investing in a mutual fund set up as a custodial account. When he was in the sixth grade, they opened a 529 college savings account, contributing $250 each month. Miles also has a 529 plan that the couple contributes $100 to each month.
â€śI have told both of my sons that there is no free ride,â€ť says Mike. â€śI call it the Lipscomb scholarship in terms of providing for their college education. I expect them to get no less than a 3.5 grade point average when they come out of high school.â€ť
Another great expectation is that their sons will bear some responsibility. â€śWe want them to contribute a small part to their college education costs, around 20%,â€ť says Brenda. So, if $80,000 is the target number, they will have to come up with $16,000.
The Lipscombs were fortunate to not be saddled with college student loan debt upon graduation thanks to academic scholarships they both received. The couple can also save for their sonsâ€™ college expenses because they live modestly: they donâ€™t have to finance any car loans or credit card debts.
As with many parents, the Lipscombs still fear that skyrocketing costs will make their sonsâ€™ college educations unaffordable when it comes time to enroll. With todayâ€™s tough economy, the average American family may not be able to save enough money to cover a four-year college education, says Rich Polimeni, director of education savings at Bank of America Merrill Lynch. â€śBut there are a couple of things that parents can to do to lessen that blow a bit.â€ť