For many parents this is an issue which causes great angst. You could easily face a bill of €11,000 to send a child to college each year- if he/she is living away from home according to a recent survey.

In general there are 4 ways to meet college expenses;

• Scholarships
• Grants
• Savings
• Borrowings

While most will not qualify for scholarships and grants this only leaves savings or borrowing to meet the costs of third level education. About six-out-of-10 parents get into debt to cover college costs. As bank loans can be expensive the better and less expensive option is saving.

So how much would you need to save to cover your child’s college bill – and what are the best ways of doing so?

5 years to college

Assuming the cost is €44,000 and you want to save the total cost of 4 years by September 2020 you’ll need to save c.€691 a month over the next 5 years to hit your target.

Regular savings policies are recommended especially those offering better-than-average interest but bear in mind you will lose almost half of your gains to tax. Parents with only 5 years until college are not in a position to recoup losses therefore higher risk investment strategies should be avoided.

10 years to college

If this is you, you’ll need to save c.€328 per month over the next 10 years to hit the €44,000 target. Parents with 10 years to save can face more market exposure as the fund is being drip fed over a longer period with regular savings.

It is advisable to look at the capital value every few years are then decide on a potentially different level of risk for the cash accumulated.

15 years to go…

Parents with 15 years to go would need to save c.€208 a month to meet a €44,000 college bill. With this time frame in mind commercial property should possibly be considered as well as regular savings into equities in the early years.

As above this should be assessed every few years and consider re-investing lump sums that build up elsewhere.