The cost of college continues to rise, making higher education one of the biggest financial challenges for families today. The average price of tuition and fees for a four-year private university in the U.S. has more than doubled over the past two decades. Even public universities have seen significant tuition increases, putting pressure on all families to save more than ever before.
For high-net-worth families, the challenge isn’t just affording college—it’s balancing education costs with other financial goals and responsibilities. Without a proactive strategy, families may find themselves making difficult trade-offs or relying too heavily on investments meant for different purposes.
In this article from Jupiter Wealth Management in Denver, Colorado, we’ll explore the growing financial burden of higher education and strategic ways high-net-worth families can save effectively.
The Rising Cost of College
The steep rise in higher education costs can be attributed to several factors, with inflation being a key driver. As the cost of goods and services continues to climb, tuition and fees have risen accordingly, often surpassing the pace of general inflation and outpacing household income growth.
Additionally, universities continue to expand administrative departments, which increases overhead expenses. Also, state funding cuts for public universities shift more costs onto students, as these institutions rely heavily on government support.
As a result, families face increasing financial pressure when planning for their children’s education. Even for affluent households, college costs can significantly disrupt long-term financial plans.
Families often struggle to balance funding college expenses with maintaining retirement savings, managing healthcare costs, including long-term care, and addressing business-related interests. Many also aim to manage or entirely avoid the burden of student loan debt. Paying for the education of multiple children or grandchildren can make it challenging to preserve generational wealth while dealing with other financial priorities.
At Jupiter Wealth, our dedicated team of financial planners in Colorado is committed to helping high-net-worth families navigate complex financial decisions with confidence. Backed by decades of expertise in wealth management in Denver, CO, we provide personalized guidance tailored to your family’s unique needs and goals.
Financial Planning Strategies for College Savings
High-net-worth families have access to several strategies for funding college education without disrupting long-term financial goals. Choosing the right approach depends on factors such as tax efficiency, investment flexibility, and estate planning considerations. Below are key strategies to consider.
529 College Savings Plans
One of the most popular ways to save for education, 529 plans offer tax advantages and flexible investment options:
- Contributions grow tax-free when used for qualified education expenses.
- Some states, including Colorado, offer state tax deductions or credits for contributions.
- Funds can be used for tuition, room and board, books, and other education-related costs.
- Parents or grandparents retain control over the account while managing investments.
- 529 plans allow tax-free transfers to another family member, such as a sibling or grandchild, if the original beneficiary doesn’t use the funds.
- Contributions over $19,000 per year (2025) may be subject to federal gift tax unless spread over five years.
- Funds not used for education are taxed on earnings and face a 10% penalty, except in cases of scholarships or disability.
529 plans can also cover K-12 tuition (up to $10,000 per year), apprenticeship programs, and student loan repayments (up to $10,000 lifetime per beneficiary). Jupiter’s Denver investment advisors are here to help you find the right 529 options for your situation.
Coverdell Education Savings Accounts (ESAs)
Similar to 529 plans, Coverdell ESAs provide tax-free growth for education expenses, but they have key differences:
- Contributions are limited to $2,000 per year per beneficiary.
- Funds can be used for both K-12 education and college expenses.
- More investment flexibility than 529 plans, allowing account holders to choose a wide range of investment options.
For families who want to save for private school tuition as well as college, Coverdell ESAs offer an additional layer of flexibility.
Custodial Brokerage Accounts (UTMA/UGMA)
Custodial accounts under the Uniform Transfers to Minors Act (UTMA) and Uniform Gifts to Minors Act (UGMA) allow parents to transfer assets to a child for future use, including college tuition:
- Assets are held in the child’s name but managed by a custodian until the child reaches adulthood.
- Unlike 529 plans, there are no restrictions on how funds are used.
- Investment growth is subject to the “kiddie tax,” meaning a portion of earnings may be taxed at the parent’s rate.
While custodial accounts offer flexibility, they should be used carefully, as assets legally transfer to the child in adulthood, limiting parental control. Jupiter’s wealth managers in Denver can help you evaluate the pros and cons of custodial accounts.
Trust Funds for College Planning
For families with significant wealth, trusts can be structured to help fund education while offering estate planning benefits:
- Assets placed in a trust may reduce estate tax liability.
- Trusts can set specific conditions for fund distributions, ensuring they are used for education.
- Investment growth within the trust is managed based on the family’s long-term financial objectives.
Trusts can be customized based on a family’s specific needs, making them a valuable tool for college funding while protecting assets. Jupiter’s Denver wealth management advisors have deep expertise in trusts and legacy planning, providing solutions that integrate seamlessly into your estate plan.
Plan for College Costs With Jupiter Wealth Management in Denver
With over 32 years of experience, we’ve been helping individuals and families pursue long-term financial success while preparing for significant expenses like college tuition.
We understand that, like all parents and grandparents, you want the very best for your children. Providing them with a quality education is one of the most meaningful ways to support their future.
Our team will work closely with you to develop the right strategies that align with your overall wealth management goals. Our services include:
- Personalized college savings plan development – Creating a customized savings strategy based on your financial situation.
- Investment management – Structuring portfolios to optimize growth while managing risk.
- Tax-optimization strategies – Identifying tax-efficient ways to fund education expenses while preserving generational wealth.
Contact us today to schedule a consultation and learn how we can help you develop a college savings plan that fits your family’s needs.
