Higher education costs and savings strategies in the US

The rising cost of higher education in the United States has led to significant financial pressure on families and calls for systemic reform. Some universities, including Duke University and the University of Chicago, now charge more than $100,000 per year, despite holding endowments exceeding $10 billion. Critics argue that the current system is fueled by billions in federal subsidies and tax-free status for wealthy institutions, which contributes to inflated tuition and massive student debt.

To manage these costs, financial strategies for college savings include 529 plans, which offer tax-free growth and flexibility to change beneficiaries, and Roth IRAs, which allow for retirement-focused compounding. Other options include parent-owned brokerage accounts, Coverdell ESAs, and high-yield savings accounts. Proposals to reform the sector include ending federal subsidies and removing tax-exempt status for large universities to encourage more competitive pricing and a better return on investment for students.