Some Thoughts on College Funding

I was a CFP® curriculum instructor with Zahn Associates for some 16 years, concluding at the end of 2022.  Part of the  General Principals of Financial Planning module deals with college funding, as it is a big part of financial planning for any family with children.

In the context of the material, this section teaches the time value of money calculations. For example, if the client has a newborn who absolutely will be attending Harvard at age 18, how much new annual saving is necessary assuming 5% inflation and 8% earnings? Harvard’s current total cost of attendance is approximately $86,900 per year for the 2025–2026 academic year.

Ready for the answer? Sitting down? Roughly $20,900/year in new savings would be needed for a newborn today – something most new parents will find daunting.

I personally feel that if I have brought a child into the world, I have a responsibility to that child to give him or her the best start possible, and that includes a solid education. Yet college funding numbers look stratospheric. In this example, one year of college may very well cost more than one parent earns in a year. So how do people do it? What follows is a bit of musing on where there’s a will there’s a way.

Current College Cost Snapshot (2025–2026)

Sources: Harvard Office of Institutional Research; FIU & MDC official cost-of-attendance pages, 2024–2025 academic year.

Child’s Savings

Whenever I wanted something as a child (or teen) my dad always made a deal with me: he’d provide some if I provided some. At one point in my teen years, I wanted to spend a few weeks in London with family there. The deal was that if I came up with my airfare Dad would provide spending money. I did it in just 10 months! For college, the deal was that Dad would pay everything except my own spending money. I was on my own for that. So summers and breaks I picked up any work that I could and learned how to stretch it and make it last through the semester. I appreciate my father’s wisdom: I built self-esteem, self-reliance, and confidence.

Loans

Lots of students take loans. We hate to see it. Why? Students in college have no idea how much $100,000 really is, or how difficult it is to repay with interest accruing. We’ve seen extremes: first, a medical specialist with several hundred thousand in loans, who came out of school with a very high income and planned to do not much more than work for the next 5 years and knock out all the debt. Then there was the physical science Ph.D., who loaned his way through his academic career. Earning a teaching salary he may never get out from under. Our position on loans is this: they make more sense in graduate school than undergrad. Higher incomes are generally earned by those with advanced degrees. Still to be avoided if at all possible.

Working Through School

This is a tough one. Florida’s minimum wage is now $14.00/hour as of September 30, 2025 (rising to $15.00/hour in September 2026). A student working 20 hours/week for a full semester (approximately 17 weeks) could earn roughly $4,760 before taxes – not enough to cover one semester at FIU (approximately $3,082 in tuition alone for 12 credits), and certainly not enough for the University of Miami, where costs are far higher. After taxes, the math is even harder. Working through school is possible but requires careful planning and realistic expectations.

Start Out at MDC and Then Transfer

This is a viable strategy. Miami Dade College is very well respected in the community. Annual in-state tuition and fees at MDC are approximately $2,838 – compared to $6,565 at FIU – making the per-semester cost dramatically lower. Working through school becomes much more viable at MDC cost levels, at least for the first two years. All MDC Associate of Arts (AA) graduates are guaranteed admission to any of Florida’s state universities – a significant benefit.

Military Service

The Post-9/11 GI Bill provides generous education benefits. For qualifying veterans attending in-state public schools, the VA picks up 100% of tuition and fees. For private schools, the current cap is $29,920.95 per academic year (2025–2026 rate, effective August 1, 2025 – July 31, 2026), up from $24,276.76 when this article was first written. This cap will increase to $30,908.34 for the 2026–2027 academic year. In addition to tuition, eligible veterans receive a monthly housing allowance (based on the military’s BAH rate for an E-5 with dependents in the school’s zip code) and up to $1,000 per year for books and supplies. These education benefits are in addition to other veteran benefits including TriCare health coverage, commissary access, and pension benefits for continued reserve service.

Gap Year

This is the year between high school and college. Some students use the gap year to travel the world. For others, the economic necessity may be that they need to work every hour available to save toward the education goal. With Florida’s minimum wage at $14.00/hour and rising, a full year of full-time work (40 hrs/week, 50 weeks) could generate roughly $28,000 before taxes – a meaningful head start on college costs, especially at a school like FIU or MDC.

Stretch It Out

Finally, there’s no cosmic rule that college must be completed in 4 years. Nothing bad happens if it takes 6 years. In the span of a 90- or 100-year life, a few years here or there means nothing. Whatever we work hard for we appreciate the most. Personally, in my own dealings, I always have a fuller kind of respect for the self-made person.

People stress about college funding. Rightly so; it is expensive! But somehow things have a way of working out. To my clients, I say this: Do your best. That’s all you can do, after all. We’re here to help you figure it out when the time comes.

Once the education is complete, you may find Student Loan Stress:  Taking Steps to Live Debt Free, and Student Loan Forgiveness Programs usesful.