Not only is the cost of a college education rising at least 6% a year, but there is another disturbing trend afoot. Even if you have systematically saved the $74,000 to $175,000 for tuition, it is becoming increasingly unlikely your child will be admitted to the college of his or her choice, especially if it is an upper echelon school. So if saving for your child’s college education means you must sacrifice all your other financial goals, you may want to rethink your plan.
Dave, a client of mine, sent his daughter to the most prestigious private high school in San Francisco with the intent that she would have an advantage getting into Stanford or an equivalent elite college—he and his wife had their hearts set on this goal. The high school was very difficult academically. A 3.5 GPA at this school is equivalent to a 4.0 in most public high schools. His daughter earned a 3.5 GPA, did things to bolster her education on her summer vacations, and excelled in extracurricular activities.
To make all of this possible, they had saved an enormous amount of money annually for ten years, hoping to send their daughter to Stanford. They regularly sacrificed other things to realize this dream, such as trips abroad and improvements to their home.
Recently, they met with her high school counselor. They were told, “Your daughter won’t get into Stanford.” Dave was shocked. When he protested, the counselor rattled off the names of numerous students who had not been accepted, even with 4.0 averages and exceptional citizenship and extracurricular accomplishments.
There are so many baby boomers with kids who have excelled academically that the likelihood of every child getting into the elite school they aim for is down there with the chance of an excellent high school basketball player making it into the NBA.