Parents need to get creative to pay for children?s college;

BOULDER ? There is good news and bad news for baby boomers sending their kids to college. The good news is that the cost of higher education in the United States may be leveling out if this year’s tuition increases are any indication of long-term trends.

This year, average tuition prices rose less than 5 percent, the lowest rate of increase in 12 years. For private colleges, the average 4.6 percent increase was the lowest in 27 years.

The bad news is that the prices have leveled out only after years of tremendous increases. According to the U.S. General Accounting Office, between 1990 and 1996 tuition rose 44 percent while median household income increased just 13.8 percent.

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Boulder parent Wynn Waggoner said, “I don’t think in today’s world, unless you’re independently wealthy, that you can afford to pay for a college education without borrowing.”

The College Board reports that four years of in-state tuition (add another $5,500 annually for out-of-state), room and board at a public institution averages $45,000 and can reach $100,000 for a private college or university.

According to the U.S. Department of Education’s National Center for Education Statistics, in Colorado during the 1998?99 school year, the cost of tuition, room and board at a public four-year institution was $7,836. The same costs for a private institution totaled $19,452. The figures do not include personal expenses, transportation, books and incidental costs included in the price of a college education.

Despite high and rising costs, Boulder County parents are managing to send their kids to college in droves. Approximately 85 percent of Boulder county high school graduates go on to some form of higher education. How are area baby boomers able to send their kids to college despite high price tags?

Though Americans between the ages of 54 and 36 fall under the monolithic “baby boomer” moniker, their lives are anything but homogeneous or predictable. The same is true for the myriad ways that baby boomers are sending their kids to college: some believe that kids should work their way through college, paying for it themselves; others have always told their kids that they’d pay for their college education; still others consider paying for a college education a joint venture.

Some boomers have invested and saved over the years, others have helped their kids locate and earn scholarships and grants, still others believe that grants and scholarships are nearly impossible to get. Most families rely to a certain extent upon student loans. More than $60 billion in federal financial aid goes to students each year. In Colorado, more than 70 percent of students at public four-year institutions borrow student loans.

Wynn and Douglas Waggoner married five years ago and, together, have five children between the ages of 20 and 25. Three of them have completed college within the last three years. Two more are in school still. Wynn’s daughters attended the University of Florida and the Atlanta College of Art. Douglas’ eldest son recently graduated from the University of Southern Illinois; his two younger sons attend the University of Colorado.

Both Wynn and Douglas invested and saved for their children’s education. By the time her daughters were ready for college, Wynn had saved more than $20,000 for each of them. Likewise, Douglas had been saving for his boys’ education since each was born.

“They were pretty conservative investments,” he said, “some government bonds, a few well-known stocks.”

“It’s tricky,” Wynn added. “As a parent, you want to be conservative because if you risk it and lose, that’s your child’s education. You want to be aggressive, though, too, to make as much as possible.”

In addition, each of the Waggoner’s kids have borrowed student loans to help pay for college. Each of the girls amassed more than $10,000 in student loan debt.

Most baby boomers expect to pay for their kid’s education the way theirs was paid for. “I worked all summer in a factory for $15 an hour. That was a lot of money back then. I made enough to pay my tuition and fees for the whole school year,” Douglas said. His boys also work.

On the other hand, Carol Sass Tuttle, the mother of three children, said her ex-husband, John, had three brothers. Each of them took 10 years to complete a four-year degree, and it was all paid for. “He told our kids all along that he would pay for their college, and that they should go to the best schools.” One of her daughters graduated from Middlebury College; the other attends Trinity. They both worked during the summer to earn spending money.

There are many options for kids and their parents. Among those options are the State of Colorado’s Prepaid Tuition Fund and its Scholar’s Choice program.

The Scholar’s Choice program, designed last year, allows parents to save for their kids’ education tax-free under federal section 529. Contributions are deductible from state taxes and go tax-free until withdrawal, at which point they are taxed at the rate of the student, not the parent. The funds increase at market rates and are managed by Salomon Smith and Barney.

The State’s Prepaid Tuition Fund was reorganized this year to lower costs and increase returns and information disclosed to participants. The program allows parents to purchase tuition units as their children grow. The value of their investment goes up with the rate of college tuition. The program is managed by the Colorado Student Obligation Bond Authority.

For more information on these two investment options, contact Salomon Smith and Barney or the Colorado Student Obligation Bond Authority.