If you're lucky in your family and friends, the money you're saving to send your kids to college doesn't all have to come from you. Remember the Nigerian saying that yielded a book title for Hillary Clinton: “It takes a village to raise a child.” As a parent, it’s your job to rally the village to cough up some for of those college costs for a good cause: your child’s future. In corporate terms, you’re the product champion.
Enlist Your Family and Friends – Keep Them Involved
Right from the beginning, when friends and family give your child money gifts, let them know that all or part of the money went right into the college fund, and that you are grateful.
It’s hard to beat the simple thank-you note for effectiveness: “Dear Richard, Thank you for the generous Christmas check for your godson and namesake. I got Richie a railroad engineer’s hat with part of it, and the rest went into his college fund. Here’s a picture of him toddling under the tree, wearing the hat.”
The one thing guaranteed to top that classic is a handwritten thank you from little Richie himself, once he’s older. When Col. Junius P. Smith, of Hamden, Conn., was clearing up his Aunt Madeline’s estate after she died at age 96, he found among her cherished family treasures a thank-you note from his grown son Roger that had been written to his great-aunt when the boy was nine.
You can also mail the occasional news clipping about college costs, with a Post-it note along these lines: “Dear Mom, Thanks again for your generosity. You're helping us be ready when your grandchild’s college tuition time comes around.” Depending on your family’s money culture, you may even want to send “annual reports” with the current savings balance. In today’s sharing society, setting up a private Facebook page to show progress is another way.
Why It's Dumb to be Shy
If this seems crass to you, take another look at the tuition figures. Educated estimates place current public-college tuition averages at about $16,000 and private colleges at around $34,000 a year. That was for the class of 2014. With a 10-year average tuition inflation rate of 5% a year, far steeper than general inflation, today’s kindergartener may face upwards of $200,000 tuition for four years at a state college in the class of 2030.
Recent Sallie Mae surveys have found that on average, families carry responsibility for 40% of their children’s college costs.
Multiply $200,000 a head by two or three kids, and you may not be able to retire until you’re 105.
Pick a Clear Dollar-Amount Goal
Take some lessons from other kinds of fundraising. Theater director Tom Ridgely, co-founder of the nonprofit theater group Waterwell, thinks of the process of funding a nonprofit show in several steps. First, define what the project is and name the figure to be met. “People relate to that better than just contributing to general operations,” he says.
Then, Tom continues, “Cheerlead like crazy.” He recalls the year of the scary shortfall. The show was in rehearsal, but like some Dr. Seuss-inspired nightmare, the script was set, the theater was let, but the budget not met...yet. Donations had come in from past donors and arts grants, but not enough.
“I sent out a frantic appeal – to the Waterwell board members, of course, and to college friends, and to the cast’s families, probably even my landlord. I asked them to give something, whatever they could be comfortable with, even just a few dollars, $5, $15, to help us.
“The rest of the ensemble did the same thing. We called it the magic of micro,” Tom says. “Every day or so I reported how we were doing. As the money mounted up, it created momentum. And – happy ending – we got enough to go ahead.” That show, “Marco Millions,” earned Tom Ridgely his first Drama Desk Award nomination.
Goal-setting; asking for help; reporting progress; sending sincere, fervent thanks to supporters; and following up with some reviews (or photos) – all standard fundraising tools and the same basic process that you can use for your child’s education fund.
You can define the college-money goal using the course credits you buy through a 529 prepaid tuition plan. Decide how many years you hope to guarantee your child at a public college and check the current costs of buying tuition credits there. That locks in the cost against future tuition inflation. (It does not always mean your child has to go to a school in that state, but check transferability carefully as you compare state prepaid tuition plans.) If you prefer a different savings vehicle, you can estimate tuition costs you need to raise and divide that amount by four (years) or eight (semesters).
Make each semester or year’s credits a goal with a deadline to add urgency to the challenge. Maybe you want your child’s freshman year prepaid by the end of eighth grade, to help college be a reality that inspires study habits. This way, you can celebrate successes semester by semester to keep your circle of contributors informed and connected, whether or not they’ve given anything lately. This shows how important the goal is to your family. Don’t forget to include the godparents in the family circle. Remember, these are people who love you and care deeply about your children’s future.
Teaching Your Child to Contribute for College
There are lessons from the old-fashioned thermometer chart fundraisers that built thousands of new parish houses and repaired legions of school roofs across America. You can put a college fund thermometer on the wall next to the line where you’ve marked out the heights of your growing children. Let them color the savings growth in red. As they get older and have jobs and paychecks, as well as gift checks and allowances, keep up the practice.
Borrow the matching-gifts fundraising tool from public radio or your alumni association to help motivate Richie and Tameka to stash some of their after-school job earnings in college accounts. Or maybe Maria’s favorite uncle will put up a dollar to match every two dollars of her own contributions. If it works for the swim team, why not for college?
Park the Cash in a Tax-Advantaged Place
Let Uncle Sam help you. Get the savings boosts of tax-advantaged Coverdell Education Saving Accounts that work a lot like a Roth IRA. Also, shop among the various states’ 529 savings plans and 529 prepaid tuition deals.
With one child graduating from college and another about to enter, New York public relations expert Andrea Kaplan has this advice for other parents: “Using a 529 savings plan is better than counting on general savings because it locks down the money. You can’t siphon it off for other things, no matter how worthy they are. You are forced to pay tuition and education costs directly to the institutions or else you pay a penalty. Psychologically it just works better.
“Have the money taken right out of your wages before you ever see it,” she says. “Otherwise it’s just too easy for life to interfere.”
The Bottom Line
Ballooning college costs will overwhelm many families’ efforts to save unless they work all the angles. But with a college fund champion in the household, someday when “Pomp and Circumstance” rings out across the college green, the proud parents can mouth words from the Beatles’ “With a Little Help from My Friends.”