Several significant trends are signaling a reset of how families plan and think about college costs. The evidence suggests that creative solutions will be required as key economic factors are conspiring to make a college degree financially more elusive.
Let’s look at the new realities of saving for higher education:
- Trend # 1 – College costs are spiking due to reduced funding
College costs have traditionally escalated 5%-6% per year already doubling the normal rate of inflation. But now in many States, budget shortfalls have taken fees increases to a new level.
California is a particularly dramatic example. University of California Regents will soon vote on a 32% fee increase which is in addition to last year’s nearly 10% fee hike. This story is being repeated in varying degrees throughout the country.