Editors' pick: Originally published Nov. 2.
The College Board is out with its benchmark college costs guide - the 2016 Trends In Higher Education.
This year - like recent years - the guide shows yet another jump in college tuition and fees, with U.S. students and families seeing up to a 3.6% hike in college costs in 2016. Worse, "The continuing increase in average published tuition and fees at colleges and universities outpaces the growth in financial aid, family incomes, and the average prices of other goods and services," the College Board reports.
Collegians attending in-state public four-year colleges face annual cost averages of $9,650 in 2016-17. "Additionally, average published tuition and fees at private nonprofit four-year institutions increased 3.6% before adjusting for inflation, rising from $32,330 in 2015-16 to $33,480 in 2016-17," the board states.
So what's a cash-strapped family to do when faced with rising collegiate costs?
If you're lucky, you can do what Lou Altman did.
Altman, founder of GlobaFone, a systems communication firm located in Portsmouth, N.H. says he chose a different route in funding his kids' college education. "I gifted them shares of my company stock held within a trust," he says. "Granted, this is only available to people who own a business. But when I founded GlobaFone my kids were little, the stock had a near-zero valuation so gifting 2% was easy to do. Setting up the trusts cost a couple thousand dollars."
Altman says the pros and cons of his strategy are certainly debatable, and the trusts do pay capital gains on the shares. "However, I am keeping my ability to pay for their schooling squarely within my control: if my company does well, school is covered. If not, it's not," he adds. "This is a very strong incentive for success."