"PSATs are in," read the text.

"Huh?" I replied.

"Your son's PSAT score is in," said my wife.

"Oh, cool. How did he do?"

"Pretty good. His score plus his GPA gives him a 60% chance of getting into Stanford!"

"Great! Wait. What?"

The preceding conversation is a not very fictionalized version of a text conversation between me and my wife earlier today. For maybe the first time, the thought of the cost of college became a very real and present concern in my household, versus the concept it had been (like retirement) up to now.

As a financial planner, I have access to a wealth of information about the cost of different things. The planning software I use with clients, MoneyGuidePro®, provides very specific information, even at the individual college level, for planning purposes. Today, I opted to look at the cost of some individual schools versus the "average" categories I typically used for my personal planning. The results were a little unnerving.

First of all, my typical default has always been in-state tuition at a place like my alma mater, Texas A&M University. The current estimate for a public in-state college in the US starting in 2016 is $24,061 per year. That is right in line with what we have been saving for his college expenses. However, today was an epiphany.

First, I looked at the specific estimates of attending Texas A&M University. Here is how it broke down:

$ 9,428
$10,330
$ 1,194

$20,952

Tuition
Room & Board
Books & Supplies

Total

I felt pretty good about that, particularly given my previous assumptions using public school averages. I also looked at a few other Texas schools.

I started with the hated (at least in my house) University of Texas, a fine second choice if a kid can't get into A&M. It wasn't too daunting of a figure, just a little more than the flagship in College Station. Total costs = $22,016 per year.

Other Lone Star choices were Baylor ($52,834), Rice ($56,703), TCU ($53,570), and Texas Tech ($19,172).That's enough of sample size for me to use the following rule of thumb for Texas schools. $25,000 a year for public and $50,000 for private colleges.

Then for the moment of truth. Stanford University has always been a school that my son has said he may be interested in attending. With today's news that his PSAT coupled with his GPA gives him at least a coin flip's chance of getting in, I decided it was time to plan for the worst. The tally?

$61,261. Oh $#!+!

That's about 3X more than Texas A&M. (Caution, there is some Aggie math being used here.) For even a little more reality, the inflation rate for colleges has been about 5% over that past decade according to The College Board®. That means the current estimates would be about double for a four year old today if that rate holds true going forward.

So what does it all mean? For me, probably a little more belt tightening and discipline about where our money goes for the next few years. For ATX Portfolio Advisors clients, it means I will do what I can to help: whether it is forecasting the cost of college for your children or grandchildren, developing a plan to get there, or managing assets that are earmarked for that goal.

One of ATX Portfolio Advisors' values is to not kick someone when they are down. Thus, we don't pile on fees when your account balance falls from one month to the next, with the hope that our clients will be more likely to stay the course when they know they have a partner on the same side of the table.

I also believe that anything I can do to encourage better education and less debt for graduates is a small investment in all of our futures. To encourage more savings for those goals, ATX Portfolio Advisors will manage money invested in a low cost 529 plan for FREE if you have other assets being managed by me. (Note that 529 plans have costs associated with them that are levied by the plans and underlying investments.)

It's not free college for everyone, but it's a start. If you would like to discuss college planning or management of your assets, please get in touch.