Educational Funding
Two or three times a year, most parents of college-age children face an unnerving experience: writing a check for their son's or daughter's tuition and the related expenses associated with their upcoming quarter or semester. With college costs rising faster than the rate of inflation, parents may find the last check they write for their child's senior year is significantly higher than the one they wrote four years earlier, when their child was just a freshman. According to the National Commission on the Cost of Higher Education, between 1976 and 1996, the average tuition at a public four-year college or university increased 390%. For private four-year institutions, the increase was 440%. During this period, the GAO reported that median household income rose only 82%, meaning the portion of household income needed to pay college tuition has nearly doubled in only 20 years.
tpbs, LLP will assist you in implementing a college education funding strategy that will ease the burden of college tuition and related costs. The Internal Revenue Code now includes a code section that allows for the creation of Qualified State Tuition Programs (529 Plans). 529 Plans also have investment, tax and estate implications that extend far beyond their basic purpose of education funding. Other techniques that lessen the burden of education funding include Educational IRAs and gifting strategies that also serve estate planning needs.