The Rising Cost of a College Education

College prices are rising at an astronomical rate. Every year college tuition increases put the squeeze current students, while future generations of students wait to see their final tuition price tag. This phenomenon has created a situation of "education-inflation". Many parents set aside money in a bank account in order for their child to be able to get a good education. Very few of these parents are aware that, by the time their child(ren) attends college, the price will have doubled or even tripled in some cases. There are a number of ways that you can "hedge" your child's college education by making use of special government programs.

There are a number of plans set up that allow you to pay for college in "units". 529 Plans or so called GET plans both allow you to this. When your children are young, you will be able to buy unit's based upon how expensive one year of college education at a state school is. One hundred units is equal to one year of education. The amount of money that these units pay out will then continue to fluctuate over time. For instance, if you pay in 50 dollars a unit when your child is 10, that very same unit may pay out 80 dollars a unit when your child is ready for college. By investing in such plans you are making a risk-free investment in your child's college education.

If you are feeling more risky, then you could invest this money in stock, instead of using one of these government sponsored education plans. This is more than likely the better option if you feel comfortable owning stock. This risk brings with it a great degree of reward. The potential to accumulate more money with the stock market is great, but the stock market is by no degree risk free. A stock market crash the year before your child goes to college could be a catastrophe.