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   What is a College Education Worth? College educated, full-time workers statistically enjoy a higher median income than those with less education. In a recent report
 Saving for College Funding a college education for a child is generally the largest purchase a family will make, aside from buying a home. And college is expensive! For the 2003-04 academic year, the average one-year cost of tuition and fees, and room and board, at four-year public colleges in the U.S. was $10,636.3 If this annual figure is multiplied for four years of study, the total reaches $42,544. And that's not everything - these figures do not include books, the cost of transportation to and from school, and other incidentals. Not only is college expensive today, the cost of a college education keeps going up as each year passes. From 1993-94 to 2003-04, the average annual tuition and required fees charged at four-year public colleges in the U.S. increased a total of 66% over this 10-year period. By comparison, inflation as measured by the Consumer Price Index (CPI-U) during this same 10-year period increased 25.77%.4 Many expect this trend to continue into the future. The table below projects college costs for a small group of well-known institutions.
Start Planning Early With college costs high and rising, a family needs to begin the college planning process as early as possible. Taking key steps now makes it easier to reach the goal:
Coverdell Education Savings Accounts (CESAs) A Coverdell Education Savings Account (CESA) is a tax-favored account designed to help families accumulate funds for future education costs. While contributions (limited to $2,000 per beneficiary per year) are not deductible, earnings accumulate tax-deferred, and qualified withdrawals are tax-free.6 Examples of "qualified education expenses" include: tuition, fees, tutoring, special needs services, books, supplies, room and board, uniforms, and transportation. Distributions for "qualified education expenses" are tax-free if made before the beneficiary attains age 30.7 The designated beneficiary for a CESA may be changed to another family member8 with no current income tax consequences if, at the time of the changes, the new beneficiary is under age 30. Non-qualifying distributions of earnings are subject to income tax and a 10% IRS penalty.
1 U.S. Statistical Abstract, 2002: Table No. 666, Average Earnings of Year-Round, Full-Time Workers. By Educational Attainment: 2000. 2 Figures do not take inflation into account. 3 The College Board: Trends in College Pricing, 2003. 4 The CPI is the Consumer Price Index for all urban dwellers, calculated by the U.S. Bureau of Labor Statistics. 5 Annual costs are for the 2002/2003 academic year and include tuition and fees, room, and board. Books, transportation, and personal expenses are additional. Costs for out-of-state students at public institutions are higher. 6 The rules discussed here concern federal tax laws; state or local tax may vary. 7 Special needs beneficiaries are not subject to these age limits. 8 See IRS Publication 970 for applicable definition of "family member." 9 Based on modified adjusted gross income. Amounts noted represent income levels in which a partial contribution can be made. No contribution can be made if income is above the upper tier amount. Securities offered through W&S Brokerage Services, Inc. Touchstone Funds are distributed through Touchstone Securities, Inc.* * Member NASD/SIPC The information presented on this Web page is only a brief description of the features of a Coverdell Education Savings Account. This material is intended solely as helpful general information. Neither W&S Brokerage Services, Inc., nor any of its affiliates or agents give tax or legal advice. The laws and regulations associated with topics discussed here are complex and subject to change. For specific tax information, consult your attorney or accountant and obtain free Publication 970, "Tax Benefits for Education," from the Internal Revenue Service at www.irs.gov or by calling 800.TAX.FORM (800.829.3676). An investor should carefully consider the investment objectives, risks, charges, and expenses found in the prospectus. For a prospectus containing complete information about a Touchstone Fund and a performance fact sheet, contact W&S Brokerage Services, Inc., at 877.452.4597. The prospectus contains this and other information about the investment company. Please read the prospectus carefully before investing or sending money.  |
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| Updated 7/6/2007 |
