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Education Funding as a Wealth Transfer Strategy: A Valuable, Narrow Opportunity

Education Funding as a Wealth Transfer Strategy: A Valuable, Narrow Opportunity

The cost of a college education is typically the first great expense a young person encounters.  According to the Massachusetts Educational Financing Authority (www.mefa.org), an average in-state public college will run roughly $24,000 for the 2023-2024 year and a little more than $100,000 for a four-year degree.  Meanwhile, the average private college will cost about $55,000 for a starting freshman and could total more than $230,000 over the course of four years.  Herbert Stein, an American economist, famously said, “If something cannot go on forever it will stop.”  The growth of college costs will peak at some point and then recede; when that will occur is much more difficult to predict. Until that time, we will address circumstances as they currently are—how to finance this significant expenditure and how to view saving for college as a wealth transfer strategy. For the purposes of this piece, we will assume that our future...