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Plan for College for Future Generations

Dad with baby in graduation cap

In today's fast-changing, technology-driven world, many jobs will require an education beyond high school — either a college education or specialty higher education training. And while higher education is a great investment, it can be expensive for parents if they choose to help pay.

The Cost of Education

College costs have risen continuously for over two decades, outstripping changes in the Consumer Price Index. According to the College Board, the average published in‐state tuition and fees in the public four‐year sector increased by $120 (1.1% before adjusting for inflation), from $10,440 in 2019-20 to $10,560 in 2020-211.

Determine What College Costs You Will Pay For

Many parents put a high priority on supporting their children and preparing them to be successful adults. However, philosophies differ on how much responsibility parents should assume for their children's higher education expenses. Parents may want their children to earn part of their expenses or depend partially on scholarships.

  • How much money do you believe you can accumulate?
  • What methods do you think will help best accomplish your college education goal?

When Two Children Head to College

When one or more children are involved, parents must consider when college expenses will occur and any overlap if more than one child is in college at the same time.

  • If there could be an overlap in expenses due to your children's ages, where can you save and invest that gives you access to funds when needed?
  • Do you want to set up separate accounts for each child, or accumulate one large pot of money?

Emphasize How to Afford College

Rather than putting an emphasis on which college a child will attend, focus your attention on how your children will afford to go.

  • What type of school might they attend?
  • How far away from home is too far, for you and your child?

Calculate a Monthly Savings Goal for College

You must fully understand what college or specialty education might cost. Research options to determine the true cost of college

  • Were you aware that the expenses might be so much in the future? How do you feel about the costs?
  • Are you willing to adjust your current spending levels to commit to this monthly investment?
  • Should you consider a plan that will meet your funding needs whether you live, die, or become disabled?

Make Your College Savings Plan Flexible

All families experience emergencies at one time or another; so, it's smart to build access and diversity into your plan.

  • Are you more interested in an approach that offers a reasonable risk — or one that may offer a high return but in which you could also lose all your money?
  • How important is flexibility and liquidity, or access to your money?

Life Insurance May Be Able to Help

Because of its tax-sheltering characteristics, life insurance can be a great option to contribute to college savings funds.

  • The death benefit from life insurance could help fund college expenses in the event that the child's parents die.
  • Generally, life insurance values are not counted as a resource with determining eligibility for financial aid. Also, life insurance can supplement other education funding methods like education savings accounts and qualified state tuition savings plans.
  • Life insurance provides potential tax-deferred access to the cash value through interest-bearing policy loans. But, any withdrawals may be taxable and will reduce the death benefit and may cause the policy to lapse.

Paying for higher education or specialty education may take multiple resources — but life insurance could be a part of the equation.


1 College Board. Trends in College Pricing and Student Aid 2020. https://research.collegeboard.org/pdf/trends-college-pricing-student-aid-2020.pdf. Last accessed 3/16/2021.

The information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) addressed by this material. This material is being provided for informational purposes only. Columbus Life does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. Consult an attorney or tax advisor regarding your specific legal or tax situation. There are insurance related costs to a life insurance policy. Premiums paid must produce sufficient cash value to pay insurance charges.