Your Bank > Education and Advice > CNB University

Sending Your Child to College

L Haelen 2016
Laurie Haelen, AIF®
Senior Vice President, Manager of Investment and Financial Planning Solutions
[email protected]
(585) 419-0670 x41970

Sending a child to college is at the top of the wish list for many parents. A college education can open doors to many opportunities and help your child compete in today's competitive job market. But, the cost of college has risen exponentially over the years and getting started on saving can be a daunting task.

College costs

For the 2021-2022 school year, the average annual cost is: $27,330 for a four-year public college (in-state student), $44,150 for a four-year public college (out-of-state student), and $55,800 for a four-year private college. Total figures include tuition and fees, room and board, books, transportation, and personal expenses. Costs for the most selective private colleges are substantially higher. (Source: College Board, Trends in College Pricing and Student Aid 2021)

It's likely that costs will continue to rise, but by how much? Annual increases in the range of 3% to 5% would be in keeping with historical trends, but it is not possible to predict if those trends will continue. Therefore, it is important to start planning as early as possible to have adequate time to accumulate the funds required.

How will I pay for it?

Year after year, thousands of students graduate from college. So how do they do it? Many parents are unable to save 100% of their child's education costs before their kids are ready for college. In many cases, they put aside enough money to make a down payment on the college bill (in the same way you might purchase a home). Then, at college time, parents supplement this down payment with:

  • Current income
  • Federal and college student-based financial aid (e.g., student loans, grants, scholarships, work-study)
  • Investments (e.g., 529 plan, mutual funds)
  • Child's savings and/or earnings from a part-time job
  • Federal Parent PLUS Loan
  • Home equity loan or other private loan
  • Gifts from grandparents or other family members

How much should I save?

You'll want to save as much money as you can in your child's college fund and a 529 plan is a popular and flexible option to use. The more money you set aside now, the less you or your child will need to borrow later. Start by estimating your child's costs for four years of college. Then use a financial calculator to determine how much money you'll need to put aside each month or year to meet your goal. In many cases, the amount of money you set aside really comes down to how much you can afford to save. You'll need to take a detailed look at your finances, as every family's situation is different.

Start saving as early as possible

Perhaps the most difficult time to start a college savings program is when your child is young. New parents face many financial demands that always seem to take over — the possible loss of one income, child-related spending, the competing need to save for a house or car, or the demands of your own student loans. Yet this is the time when you should start saving.

When your child is young, you have time to select investments that have the potential to outpace college cost increases (though investments that offer higher potential returns may involve greater risk of loss).

You'll also benefit from compounding, which is the process of earning additional returns on the interest and/or capital gains that you reinvest along the way. With regular investments spread over many years, you may be surprised at how much you might be able to accumulate in your college fund.

Don't worry if you can't save hundreds of dollars every month right from the beginning. Start with a small amount and add to it whenever you can. If it seems overwhelming to start the process, a professional advisor (such as a CERTIFIED FINANCIAL PLANNER™ Professional) can assist you in setting goals and staying on track. Please reach out to us if you need assistance getting started and we will be happy to help.


©2022 Broadridge Investor Communication Solutions, Inc. All rights reserved. This material provided by Laurie Haelen.

This material is provided for general information purposes only. Investments and insurance products are not FDIC insured, not bank deposits, not obligations of, or guaranteed by Canandaigua National Bank & Trust or any of its affiliates. Investments are subject to investment risks, including possible loss of principal amount invested. Past performance is not indicative of future investment results. Before making any investment decision, please consult your legal, tax or financial advisor. Investments and services may be offered through affiliate companies.