Saving for College
Saving for college can start as early as birth. With the rising cost of college tuition, every penny you put aside now will help. There are several avenues to use when planning for your child’s future college career.
The most popular way that parents are saving money for college is 529 plans. A 529 plan is a college savings plan that offers parents a way to make tax-free contributions. (The maximum amount of money that can be contributed each year is $12,000.)
The 529 plans have several advantages:
- The plans offer higher interest rates than a standard savings account.
- Any member of the family can start this plan for a child.
- 529 plans can be started at any age.
- Any unused money from a 529 account can be rolled over into an account for another sibling to supplement their college funds.
Each state has individual 529 plans. Check out the offerings and decide which is right for your needs. Choose a plan that has low maintenance fees with many choices for investment strategies.
As the time for college nears, ask your child where they plan to apply. Make a list and total up the costs of tuition, room and board, and books. Check this against your current college savings to see if their choices can be managed.
Encourage your kids to get good grades in school. High SAT or ACT scores, combined with great grades, are strong points to qualifying for a college scholarship. If your child likes sports, a strong showing here could garner an athletic scholarship.
Make sure that you fill out the federal financial aid application. This form is available to students every January. It is a free application that provides the financial information you record to all of the schools where your child applies. A financial report will also be sent to you and your child to see which grants and scholarships your child qualifies for.
Saving for college is a major concern for parents. Even if you start to save late, there are options for you and your child. Developing a saving strategy will save worry and headache.
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Saving for college can start as early as birth. With the rising cost of college tuition, every penny you put aside now will help. There are several avenues to use when planning for your child’s future college career….