• Government
• Profession
• Business
• Opinion
• Health

• Health reform
• H1N1
• P4P
• EMRs
• Medicare
• Liability
• AMA House
• » More

• Book Excerpt
• Business Pitch
• Meetings
• » More

• Contract Language
• Ethics Forum
• In the Courts
• Practice Management
• Technically Speaking
• » More

• Bby date
• Regions
• Health plans
• Sections
• News briefs
• Columns
• Editorials
• Letters
• Writers
• Other years

• Search tips
• E-mail alert
• Radio
• RSS
• Mobile
• Subscribe
• Institutions
• Staff directory
• Advertising
• Permissions
• Reprints
• News media
• Site guide
• Useful links
• About
• Premium
• Contact

Educate yourself on college savings plans

Personal Finance. By Katherine Vogt, amednews staff. Oct. 13, 2003.

• PRINT|
• E-MAIL|
• RESPOND|
• REPRINTS|
• SHARE

Colin R. Cave, MD, came down with a case of sticker shock. It was from thinking about how much it would cost to send his two children to college.

After his son Christopher was born nearly seven years ago, he and his wife started putting about $50 a month into mutual funds for the boy and his older sister. But he soon realized it wouldn't be enough.

"The sheer shock of what it would cost to send a child to four years of college when they reach college age put me into panic mode," said Dr. Cave, an otolaryngologist and president of the Oregon Medical Assn. He increased the amount to about $700 a month, which proved to be a little too much for the family budget, resulting in some debt.

Now, years later and with the advice of a financial planner, the family has opened college savings plans for each child, while keeping some money in mutual funds. Putting about $200 away a month, Dr. Cave said his goal now is to save about one-third to half of the projected cost of his children's education before they enroll.

"Taking away the terror of having to have the entire cost in the bank really helped alleviate some of the anxiety I was feeling," he said. With the cost of a four-year college education now more than $100,000 for some schools, and the bill rising nearly 8% each year, experts say physicians can benefit from a strategy to ease the inevitable anxiety about college costs.

Parents can choose from a variety of college savings vehicles ranging from prepaid tuition to simple savings accounts. But the right plan is not always the same for each family or even for each child, depending on the child's age and academic aspirations. Experts say parents with younger children have more flexibility to engage in aggressive investment strategies while those whose kids are nearing college age could benefit from a safer approach.