Advisors weigh college with their clients: 'People are really starting to question the price tag'

With the cost of a four-year college degree carrying a six-figure price tag for many families, financial advisors are increasingly prioritizing college planning conversations with their clients.

“The college planning topic is definitely striking a chord. I’m hearing it everywhere — from clients, their kids, and even friends in the industry — people are really starting to question the price tag, and have been for years. When a four-year degree can cost $400,000 or $500,000, families are asking whether that diploma is truly worth it,” said Bay Area-based financial advisor Adam Spiegelman.

Spiegelman, who launched his own RIA earlier this year after departing Commonwealth, pays roughly $200,000 per year between his two boys who currently attend college. College tuition experienced an average inflation rate of 5.94% per year since 1980, compared to the overall inflation rate of 3.07% during this same period. College tuition costing $20,000 in the year 1980 would cost $268,575.69 in 2025.

“We encourage parents to communicate their expectations and level of financial support early in the process,” said Mark Roman, managing partner of Veritas Boston Wealth Management. “Establishing clear parameters — such as committing to cover costs up to the level of a state university — can help minimize misunderstandings once the application process begins. This approach sets shared expectations and supports more constructive family discussions around school choice and financial responsibility.”

Superfund 529 plans
 

Advisors are keen on helping set up 529 education savings plans for clients, who often will not qualify for financial aid. 529 plans are “basically a Roth IRA for education,” says Spiegelman, as the accounts can provide tax-free growth and tax-free withdrawals. More than half of Americans don’t know what 529 plans are, according to a study by Edward Jones and Morning Consult.

“Many parents don’t realize they can superfund 529 plans using several years of gifting allowances up front, or that 529s can now be transferred among family members,” says Spiegelman. “Even if you ended up paying taxes and penalties on those dollars, the tax-deferred growth often still leaves you ahead compared to saving in a taxable account."

Individuals can contribute up to $19,000 in 2025 towards a 529 plan without those funds counting against the federal government’s lifetime gift tax exemption amount. For a married couple filing jointly, that exclusion limit doubles to $38,000.

The “superfunding” route mentioned by Spiegelman allows for contributions up to five-times the annual exclusion in one year, and is treated as if you made equal gifts over five years. In 2025, that means 529 contributions can reach $95,000 for an individual donor or $190,000 for a married couple.

“Several clients treat their 529s like cash flow during the college years — reimbursing themselves for tuition, housing, or expenses already paid — which is fully allowed as long as it stays within the school’s published cost of attendance. The definition is strict, and distributions have to match the years the student is actually enrolled, but when managed properly it works beautifully,” said Spiegelman.

Falcon Wealth Planning founder Gabriel Shahin says parents can teach their children valuable lessons by not paying entirely for their college expenses. Companies such as Amazon, Walmart, Waste Management, Starbucks, Pepsi, Spectrum, Disney, Boeing, and JP Morgan Chase offer programs to help pay college tuition for their employees. 

“Even if you have more money than God, tell the kids you will pay for 66% of the school. This will encourage them to prioritize care and make a wise financial decision, rather than simply choosing the school with the most appealing weather and the highest tuition,” Shahin said. “You can choose after the four years to pay the 34% off or better yet, if they finish in four years and get a certain GPA.”

Is college the right fit?
 

The rising costs of higher education have led financial advisors and their clients to increasingly consider if college is the right fit for children who might be better suited at a trade school or apprenticeship. Famed financial advisor Ric Edelman’s new book, The Truth About College, analyzes these decisions parents and teens must make following high school.

“I wrote 'The Truth About College,' not as an indictment against the failings of our higher ed system, but to show parents and their teens the way to achieve success through the college path,” said Edelman. “Almost every household in America that earns $200,000 or more is headed by somebody with a college degree. We know that college graduates earn a million dollars more over their careers than people who didn't go to college, and we know that college graduates live longer and live healthier, happier lives.”

In Edelman’s research for his book, he found that 37% of mail sorters at the post office have a college degree. With student loan debt in the US reaching $1.8 trillion, not all college majors will lead to career path outcomes that can justify the cost of their diploma. 

“I encourage clients to think in terms of future flexibility and what outcomes are likely given the field of study, school reputation, and cost. For some children, trade programs or a gap year to gain clarity make perfect sense,” said Georgia Lord, head of financial planning at Corbett Road Wealth Management.

“I also see families neglect the conversation about graduate school - funding undergrad is one thing, but many children pursue advanced degrees and that requires more planning and saving,” Lord said.