PLANNING FOR COLLEGE COSTS

With fees approaching six digits, it's never too early to look at investment strategies that can lighten the tuition burden

Minutes after they finished taking their vows, Leslie and Dwayne Bond began sweating over how they would pay for their son’s college education. Married in 1989, the Bonds, now both 30, had decided Jarami’s future would be a priority even before he was born. After assessing their debt–nearly $30,000 consisting of two car notes and credit card balances–the couple, who live in Upper Marlboro, Maryland, began paying their creditors off with a vengeance. Today, their bills are kept to a minimum–the only large expenditure they have left is their mortgage, which they hope to eliminate in 15 years.
In fact, Dwayne, an account manager at Oracle Corp. in Bethesda, Maryland, says the Bonds are doing so well, a townhouse the couple bought in 1991 has been earmarked for rental. They may even sell the unit in time for four-year-old Jarami’s freshman year in 2011. Some might call them overachievers, but the Bonds believe their attitude has played a big a role in anything they’ve achieved. “We decided a long time ago not to try to keep up with the Joneses,” avows Leslie, who operates Total Excellence Consulting, a home-based financial and time management business. “We truly believe the short-term sacrifices will bring us rewards in the long term.”

That’s sound advice for those of you who might be raising a budding genius. Financing the degree your son or daughter will need to survive in today’s cutthroat marketplace is approaching $55,000 for four years and should well surpass that figure soon, according to the College Board, a New York-based nonprofit organization that tracks educational funding. Experts suggest that by 2006 four years at Northwestern or Harvard might cost as much as $142,000.

What’s more, not only are college costs going up, but financial aid is decreasing. The Federal Government’s Pell Grant program dropped from $5.6 billion in 1994-95 to $5.3 billion in 1995-96, according to a 1996 survey by the College Board. The report also shows that federal, state and institutional aid to students increased $2.1 billion to total $50 billion in 1995-96, but most of the growth was due to additional loans awarded to students rather than grants. Even if President Clinton’s proposed tax incentives to help people seek higher education passes, keeping up with the rising costs will be a difficult task. In a letter at the beginning of the survey, College Board President Donald M. Stewart, laments, “Since the mid-’70s, the Pell Grant has lost ground both to inflation and to the rising cost of college–a 37% decrease over 20 years.”

Such is the reality for cash-strapped families trying to provide educational opportunities for their children. So what should you do if you want the very best for your child? BLACK ENTERPRISE decided to tackle that question by reviewing the myriad choices parents face on the way to building a sufficient college fund. The universal lesson we’ve uncovered is, no matter what path you take, the key thing is to start your tuition program today.

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