Families need to look at undergraduate and graduate education as a package deal, says David Bendix, a certified public accountant from New York. Students may decide to go to a cheaper undergraduate program at a state university because they'd like to go to the Wharton School of Business at the University of Pennsylvania for an MBA, he says.
He discusses the cost of an undergraduate education and graduate education with his own children in terms of what the student is getting for the money.
4. How much debt will be accrued earning an undergraduate degree? One of the arguments for saving 529 plan funds for graduate school is that investments will earn more the longer money is invested. However, this doesn't apply as much if a student is financing an undergraduate degree with unsubsidized federal loans, where interest is accrued while the student is in school.
"This doesn't make sense if you're paying more in interest than you're earning," Lee says.
Maintaining high earnings would require stock market-based investments, which is too risky a strategy to use within a few years of when the money will be needed. At that point, it's "no longer investing, it's gambling," she says.
Trying to fund your education? Get tips and more in the U.S. News Paying for Graduate School center.