College Funding

Planning for college costs is required to begin early for young generations today.

• College tuition costs have increased more quickly than any other household expense since 1983.
• On average, tuition costs have gone up 6.4% each year during this period. At that pace, prices would double about every 11 years.
• Tuition has risen twice as quickly as medical costs and nearly five times more than home prices.
• Savings accounts, CDs and other short-term investments typically don’t earn enough to outpace tuition inflation.

Utilizing tax-free investing for qualified education expenses* with levels of flexibility, control and contribution maximums along with special gift and estate tax benefits can be helpful for the potential of increased college savings.

Source:  BLS Consumer Price Index, J.P. Morgan Asset Management.  Data represent cumulative percentage price change from 12/31/82 to 12/31/17.

*Earnings on non-qualified withdrawals may subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. Federal law allows distributions for tuition expenses in connection with enrollment or attendance at an elementary or secondary public, private or religious school (“K-12 Tuition Expenses”) of up to $10,000 per beneficiary per year.