Education and College Planning

  • Do you plan to help pay for your kids’ or grandkids’ college? 

  • Do you know how much they will need? 

  • Have you started saving for their education? 

  • Have you shared your plans with your children? 

  • Have you explored financial aid or scholarship opportunities? 

  • Have you done a comparison of paying versus borrowing for college education?

Things to consider

There are many compelling reasons to attend college —primarily the fact that graduates have more earning potential. Additionally, many jobs today require a degree. It’s important for parents and kids to have open conversations about the earning power of various professions, as well as potential student debt.

What you need to know

Why go to college:

  1. Better employment opportunities — a college degree significantly increases your employability
  2. College graduates take home 84%¹ more than people with only a high school diploma
  3. A bachelor’s degree could earn you $2,700,000¹ more in a lifetime than a person with only a high school diploma

Understand the earnings power of various professions vs. the potential debt / cost of various degrees.

What it means

In 2015 the average cost of a four-year in-state degree was approximately $78,1926. If you have to get a student loan, the average interest rate is around 5.5%*. This means the cost of your average four-year in-state degree, will actually cost $102,673 at 5.5% over 10 years. That same $78,192, assuming 6% annual increases in college expenses, will cost $223,186 in 2033. Assuming the same loan structure, that loan would total more than $293,062 in the future.

How do you pay for college? 

Work with your advisor to determine how to pay for college in a way that is best for your personal situation.

Work with your financial advisor to help estimate the cost of college and build it into your financial plan. Then your advisor can assist you in establishing a college savings plan and include it in your overall strategy.

Contact an Advisor >>

* The average interest rate on student loans is as of the period in which this brochure was published (April 2016).

1. — How Much More Do College Graduates Earn Than Non-College Graduates?

2. NACE — National Association of Colleges and Employers -- Spring 2016 Salary Survey

3.  "10 Student Loan Facts College Grads Need to Know." US News & World Report., 9 May 2016

4. USA. Department of Labor. Bureau of Labor Statistics. Earnings and Unemployment Rates by Educational Attainment, 2015. 15 Mar 2016

5. Ivy Coach — Average Ivy League Cost 2016-2017 Academic Year

6. CollegeBoard — Average Published Undergraduate Charges by Sector, 2015–16

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*This is a partial listing of Financial Engines’ customers as of December 31, 2017. These companies have consented to disclosure of their relationships with Financial Engines. This does not constitute an endorsement or approval of the advisory service provided. Third-party marks appearing on this site are the property of their respective owners.

*Investment News, RIA Data Center, 2018

*Methodology: InvestmentNews qualified 2,172 firms headquartered in the United States based on data reported on Form ADV to the Securities and Exchange Commission as of May 1, 2018. To qualify, firms must have met the following criteria: (1) latest ADV filing date is either on or after January 1, 2017, (2) total AUM is at least $100M, (3) does not have employees who are registered representatives of a broker-dealer, (4) provided investment advisory services to clients during its most recently completed fiscal year, (5) no more than 50% of amount of regulatory assets under management is attributable to pooled investment vehicles (other than investment companies), (6) no more than 25% of amount of regulatory assets under management is attributable to pension and profit-sharing plans (but not the plan participants), (7) no more than 25% of amount of regulatory assets under management is attributable to corporations or other businesses, (8) does not receive commissions, (9) provides financial planning services, (10) is not actively engaged in business as a broker-dealer (registered or unregistered), (11) is not actively engaged in business as a registered representative of a broker-dealer, (12) has neither a related person who is a broker-dealer/municipal securities dealer/government securities broker or dealer (registered or unregistered) not one who is an insurance company or agency.

All information provided through the Education Center is for education purposes only and does not constitute investment, legal, or tax advice, an offer to buy or sell any security or insurance product or an endorsement of any third party or such third party's views. Whenever there are hyperlinks to third-party content, this information is intended to provide additional perspective and should not be construed as an endorsement of any services, products, guidance, individuals, or points of view outside Financial Engines. All examples are hypothetical and for illustrative purposes only. Please contact one of our investment advisors for more complete information based on your personal circumstances and to obtain personalized individual investment advice.

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