Create a Financial Plan to Meet College Expenses

Article excerpt

College has become exceedingly expensive.

Cots have risen in the double digits for five of the past 10 years. Tuition has risen twice as fast as inflation in the same period. By 1990, it will likely cost more than $20,000 to send your child to Harvard or Stanford. By the end of the century, that figure could double.

Last week, I discussed how to begin college planning. We talked about some of the financial instruments available and when one or another might be best, depending on your child's age.

Today, we'll discuss creating a financial plan and figuring out how much this experience is going to cost you.

Much of your education planning depends on your child's age right now. Fidelity Investments has something called a ``College Cost Worksheet'' which can be sent to you. It begins by asking your child's age and how many years until he or she enter college. Next, you enter your estimate of college costs.

Now, let me interrupt here for a moment. You're probably saying, ``How in the heck should I know how much college costs?'' Well, rest easy, there are several ways to quickly find out.

One is a book published by U.S. News and World Report magazine. It's called ``The U.S. News Guide to America's Best Colleges'' and costs $7.95 at bookstores and news stands. It describes 1,300 colleges nationwide, including statistics on the percentage of graduates who are placed in jobs, financial aid and, of course, costs. There are also several articles with tips on getting into a plan for paying for college.

If you have a personal computer, there are two excellent programs to help you with the college experience.

- One is called ``The Perfect Score,'' which helps your child prepare for the Scholastic Aptitude Test (SAT).

- The other is ``The Perfect College,'' which helps you pick colleges or universities according to your own criteria. It's called a database program, and you choose what you're interested in: location, costs, academic interests, size and so forth, 26 categories in all. When you select your criteria, the program finds all the schools that meet them.

Now, if you have a personal computer and a modem for telecommunications, you also can get information ``on-line'' from CompuServe. The CompuServe service is called ``Peterson's Guide to Four-Year Colleges 1988,'' and there is one for two-year colleges as well.

You are introduced to the program through menus that help you search the database, similar to using ``The Perfect College.'' You have a menu of search features here too, including level of study, entrance difficulty, costs, admission requirements and deadlines, and so forth.

Well, one of these three sources should help you get focused on college costs, so you can continue with your Fidelity College Cost Worksheet. Tables help you determine inflation factors and rate of return factors. …