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Getting a College Savings Plan Vs. a College Investment Plan

Getting a College Savings Plan Vs. a College Investment Plan

July 31, 2023

We all wonder… what is the best way to pay for collegeTo me this is a trick questionI think the focus should be, what resources are available so that you don’t have to pay for college? A college savings plan should be about what steps you can take to avoid certain college costs all together. Your college investment plan should then assist with supplementing these stepsUnfortunately most of our industry is focused on shaming parents into investing substantial sums of money for college without consideration of a real college savings planAs children grow, focusing on developing a college savings plan is an important step in the college planning processTo maximize success here, consideration and discussion of these concepts with your son or daughter really has to occur upon entrance into High School.

Advanced Placement Courses

Certainly getting college credits in HS can be a great head start. In my own experience my son was able to get a full semester of courses completed through AP exams. In the end, he did not get credit for every class he took, as a few of the exam scores he did not meet the schools minimum score for credit, but he did learn and gain college-like experience with the material, which is valuable as well. In our house we tended to focus more on how much could we capture, rather than perfectionIn the end the approach still wound up getting him a full semester’s worth of credit. In his case it happened pretty naturally without a lot of pressure or parent intervention. We just tried to help him strategically select classes that would support his future goals.


Many people do not know about CLEP exams (College Level Examination Program)CLEP is an alternative to AP exams offered by College BoardIn some instances the CLEP exam might be a little easier than AP.  Many of these exams can be done now via remote access with digital proctoringAs of this writing a CLEP exam is $93.00If your child is good at self study, or took the honors version of a class because AP wasn’t offered, a bit of additional study might enable them to “CLEP” the courseAt $93.00 it might be worth consideringA review online indicates that the pass rates for many exams with CLEP are slightly higher than AP, another aspect to consider.


There are tons of scholarships out there, but you have to be proactive about seeking them out. One thing to remember is that a lot of small scholarships can add up to a lot of tuition savingsIn addition, according to a Fastweb article from January of 2023, about $100 million in scholarships go unused each year because of lack of applicantsIn my own experience, I witnessed scholarships being repurposed because there was no applicant that met all of the narrowly defined criteria that the scholarship was designed forIn those cases, they just tried to pick the most qualified applicant. So advise your student that even if they meet some aspect of the criteria, it’s probably worth it to applyNothing ventured, nothing gained.

It’s not where you start, it's where you finish… 

I was always told this and it’s true. I had a friend whom I started with at Rutgers, who transferred to Columbia. His degree says Columbia, so does his LinkedIn profile. Other than myself and a handful of people, nobody knows. This is especially great for students who aren’t so sure about their career goals.

Sometimes I like to frame these discussions with a different story to see if our decision making makes sense. What if we viewed funding a career like funding a business. If a person came to you and said, “I want to open a business, however I have no plan, no idea of how much money it will make, and little experience, but I need $100,000 of your money to finance it”, what would you say? I feel like parents are in the same position about a career plan. I am not here to judge your prospective students career plan, figuring out what you want to be at 18 is not easy. I am simply pointing out that why pay $40,000 a year to figure that out, when you can figure it out for $5,000. If your child is highly motivated and has a set of clear defined plans, then maybe you might be inclined to spend more, but that brings me back to the same starting point, should you refuse free?

Low Cost College Courses for Transfer

In Connecticut we have the PACT program (Pledge to Advance CT). This program has been updated over the years to now include part time students. The short of it is the PACT program is a path for students who have recently graduated High School to attend Connecticut Community Colleges for Free. Transfer credit programs between the Community Colleges and the Connecticut State University System (WestConn, Central, Eastern, etc.) have been recently enhanced, so many of the issues with transfer credit that used to exist are now greatly reduced.

In addition to this type of program, many online courses are now available. Websites similar to Sophia are now available for low cost transfer courses. I would encourage a lot of research here, as transfer agreements in these situations can be very specific. Make sure to clear it with your intended transfer school to be sure that credits will apply.

Guard Service & ROTC

I would be remiss to say that military service is also an option. This option might not be for everyone, however in my own experience my son gained a fair amount of personal confidence and independence from the training. The options are ROTC and also your state’s Guard Units. One of the main differences is that ROTC is a competitive scholarship process and can apply to a variety of public and private institutions. Upon completion your student would have an obligatory period of service as an officer in the service branch they elected. Guard Units on the other hand are operated at the state level. Service branch options here are the Army, National Guard, and the Air National Guard. There are a variety of roles available in both cases. One benefit of Guard enlistment is an in-state tuition waiver to any state school. For example a Connecticut student attending school in Florida can join the Florida Air National Guard and would be extended a tuition waiver to Florida State schools.

In addition, students are extended GI Bill benefits upon immediate enrollment in college, prior to completion of their 6 year service contract. This bit of extra pay can help with all of the incidental expenses. Another difference between this and ROTC is you know where your service obligation will be for drill. To be fair there is a risk of deployment during the 6 year period. In the case of our son we weighed the benefit of graduating student loan free with a $15,000 bonus, or graduating on time. Having the gift of hindsight, graduating at the exact same time as my peer group seemed less important than being debt free and having a great start in life.

If you want to have a conversation about planning options, that includes both Savings & Investing, I invite you to reach out to and schedule a time to chat to see how we can help.