Monument Wealth Management Articles

Paying for College Upfront: The Option You May Not Know Exists

Sep 24, 2021 Passing Down Family Wealth

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When it comes to actually paying the bill for your child to go to college, there’s an option that schools don’t advertise. In fact, you’re probably going to have to proactively ask about it.

What is it? Paying for all four years of undergraduate costs upfront. Basically, rather than paying your child’s university bill on a semester basis, you pay a portion or most of the expenses upfront when they enroll.

I want to fully acknowledge that this option is truly the exception. In the past 20 years, average tuition costs rose by 144% at private universities and even more at public universities—165% for out-of-state students and 212% for in-state students (Source: Nancy Paul).  Many families struggle to meet these high costs, either with or without incurring student loan debt.

But, if you are one of fortunate who can afford to do so, pre-paying your child’s college expenses could end up saving you money.


What You Need to Know

  • Not every college and university offers a pre-payment plan.
  • There is no standard pre-payment plan, every school’s offering is unique.  Schools that do offer upfront payment differ on terms and what exact expenses can be paid upfront. (tuition, room and board, other fees and expenses)
  • You are locking in prices at the time of enrollment—this is where you’re saving money; colleges often increase costs 4-5% or more from year to year.
  • You should consult your tax advisor prior to making any payment from a 529 plan.

What Questions to Ask the School

  • Does the university already offer a tuition rate “lock-in” for all four years? (ie, they guarantee the costs will not increase during a student’s tenure)
  • What if my child decides to transfer to a different university?
  • What if my child decides to study abroad?
  • What if my child decides to live off-campus?
  • What if my child takes a leave of absence?
  • What if my child wants to take summer sessions?

What Are the Risks?

  • The college doesn’t actually raise costs as much as they historically have—you’ll get the expense out of the way, but you won’t end up saving as much money as you thought.
  • The college raises the costs on the expenses that you haven’t pre-paid. (for example, you pre-pay tuition as part of the university’s plan, but not room and board)
  • Your child may enroll part-time at some point during their tenure, which are lower costs than the full-time costs you’re pre-paying.


Saving for college is a marathon, not a sprint.

Want to know if you’re saving enough for college—or how to balance saving for college with your other goals? That’s where we come in. At Monument, we’re known for our straight-forward, unfiltered advice. We can and will answer your specific questions and help map out a plan–adapting and changing it as needed along the way. Whether you’re trying to save for a future college expense or want to know if paying in one lump sum is your best option, reach out to Monument, we can help.

Emily M. photo

Emily M. Harper, CFP®

Vice President & Partner

Emily’s background in the financial industry began after she graduated from the University of Virginia. During a seven-year run in various advisory and leadership roles at a global asset management firm, Emily acquired four industry licenses, a certificate in Financial Planning from UVA, and her CERTIFIED FINANCIAL PLANNER™ designation.

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