Educational Planning is an endeavor that every responsible parent should perform as early as possible. It involves the conscious and disciplined setting aside of funds on a periodic basis to finance a child's education needs in the future.
The tuition and miscellaneous costs of a four-year college education is typically the subject of educational planning by most parents. This is due to the fact that the money will be needed on the 18th year of the child (this is following the new K-12 curriculum). As such, if the child is of an age under 10, there is enough time for a parent to compound and grow the money over time in order to meet the requirements of a college student several years down the road.
STEP ONE: CALCULATE THE AGE WHEN BABY ENTERS FIRST YEAR OF COLLEGE
Below is the snapshot of the K-12 curriculum that is now being implemented in the Philippines. Along with it are the age and years on which an infant born in 2015 will be attending pre-school, elementary and high school.
Notice that two years have been added to the high school years.
As seen on the above chart, a baby born in 2015 will enter the first year of College on his/her 18th year and will do so in the year 2033. The child will be attending a typical four-year College course during the years 2033 to 2037.
STEP TWO: IDENTIFY PROSPECTIVE COLLEGES AND UNIVERSITIES
Now that the age and years of College attendance have been identified, the next step is to look at the alternative universities where the child will possibly be attending. For purposes of illustration, let's consider the following schools in Metro Manila:
STEP THREE: CALCULATE COST OF EDUCATION WHEN BABY ENTERS COLLEGE
Projecting the typical education cost in 2015 of a 4-year college course from data released by the Commission on Higher Education (CHED) back in 2008, and applying an estimated annual tuition fee increase of about 12.5% per year, have come up with the following estimates:
Estimated Cost in 2015
Estimated Cost in 2033 (First Year of College - applying the estimated average 12.5% annual tuition fee increase)
Now, multiply the above tuition fees by 4 while simultaneously applying the 12.5% estimated yearly tuition fee increase to each year and you have these pretty mind-boggling figures.
Cost from 2033 to 2037 (Estimated Total Cost of 4-Year College Education)
As the parent of a baby born in 2015, ask yourself this question: Are you sure you will have the CASH FLOW and resources to come up with these spectacular figures to sustain your child's college education from 2033 to 2037?
If not, you need to start saving and planning for it NOW!
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