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Saving for college: What families can do today

Published: Sunday, Oct. 14 2012 6:43 p.m. MDT

John "Jackie" Robertson and his wife Shauna laugh as they walk with two of their girls Jordan and Joei near their home in Salt Lake City Sunday, Oct. 14, 2012.

Jeffrey D. Allred, Deseret News

SALT LAKE CITY — For many families, among the proudest moments for parents is when their children go off to college. And while getting a degree takes hard work and discipline, many don't realize that an equal or greater amount of work and discipline is required to be in a position to pay for it.

Native Utahns Jackie and Shauna Robertson understand the principle.

Jackie Robertson is a human resource professional, Shauna Robertson is a justice court judge. Long before becoming the parents of three high-achieving daughters and before their salaries started to climb they discussed saving for college. Two principles emerged: sacrifice and planning.

“We started identifying areas in which we could save some money,” Jackie Robertson said. Those areas included buying savings bonds, certificates of deposit and enlisting the help of a financial planner.

“Each child had accounts … savings, CD’s, etc.,” Shauna Robertson said.  “And there is a (common) pot for all of their in-school needs.”

The cost of getting a college education has increased steadily over the past three decades, and so has the rate of debt incurred by students.

According to the National Center for Education Statistics, the cost of tuition, room and board for a public 4-year institution during the 1980-81 academic year was $2,550, while the cost for a 2-year school was $2,027.

Within 10 years tuition costs skyrocketed 106 percent to $5,243 for a public 4-year school and up 71 percent to $3,467 for 2-year school. 

Fast-forward to the 2010-11 school year.  Average college costs have risen to $15,918 a year for 4-year public schools and $8,085 at 2-year schools. That's  a 524 percent increase during the past three decades for a 4-year school.

Comparatively, tuition costs at private 4-year institutions soared 483 percent over the same time frame from $5,594 in 1980-01 to $32 ,617 in 2010-11.

The Robertson’s eldest daughter Jacquenita, 23, is pursuing a doctorate in Pharmacology, while their middle child, Jordan, 19, is in her second year of college. Both attend out-of-state institutions — one public, one private.

The youngest daughter, Joei, 17, is expecting to enroll in college next fall — possibly at an Ivy League school.

With three kids in college simultaneously, maintaining the same level of savings will become more challenging, but the practices put in place two decades ago remain sound.

The Robertsons’ said they hoped to save enough money through the various accounts to pay for a majority of their kids’ college expenses, with the balance coming from scholarships earned by the children. Thus far, the plan has worked well — paying approximately half for Jacquenita and about 75 percent for Jordan.

Make a plan

Having started over 20 years ago, they were smart for taking such a proactive approach, said Jeff Solomon, financial adviser with Edward Jones Investments.

He suggests that parents consider college savings plans that offer distinct tax advantages, such as the Utah Educational Savings Plan — a nonprofit 529 college savings plan designed to encourage individuals and families to begin saving for the future costs of higher education. (http://www.uesp.org/)

According to the U.S. Securities and Exchange Commission, 529 plans — known legally as “qualified tuition plans” — are sponsored by states, state agencies or educational institutions and are authorized by Section 529 of the Internal Revenue Code.

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