Education Costs: The cost of going to college for students and their parents.
COST OF COLLEGE EDUCATION
Parents, in general, like their children to go to college. However, most parents find themselves in desperate need of financial help when it comes time to pay for their children’s education. Whether they’ve saved nothing – expect the child’s loans to cover all expenses or they saved some, but not nearly enough. Either way, this becomes a hardship on the child and the family. With college education costs more than doubling in the past 10 years, you’re probably asking yourself, “What’s a parent to do?”
EARLY PLANNING
Start saving as soon as possible for your child’s education. If you start when the child is young, you will have more time to save. This will allow you to start saving with a small amount of money, increasing the amount as the years go by and your income has increased. There are many ways to save for you child’s education, here are a few methods available:
Typical savings account – Savings Account: A savings account offers a secure place to put your money usually with building interest… MORE>
Educational IRA – This tax-deferred account allows you to contribute annually per child towards your child’s college education… MORE>
Home Equity Loan – Home equity loan or line of credit may be a great way to generate funds for college… MORE>
Certificates of Deposit CDs – A minimum deposit investment that guarantees the same rate of return for specified… MORE>
Mutual Funds – These offer stock market access to the small investor with investment diversification and professional management… MORE>
Living Trusts – With a living trust you can manage your properly while your alive and even after death… MORE>
Stocks – A stock is a share of ownership in a company that may pay you a portion of their profits… MORE>
Annuities – An investment that makes guaranteed fixed payments at regular intervals over the period of time… MORE>
Bonds – A debt instrument in which the issuer promises to pay to the bondholder principal and interest according to the terms and… MORE>
Don’t let your child’s college fund limit them in their college dreams. Give your child not only a college education but the opportunity to choose the college they attend and the courses they will study.
TAX CREDITS
Parents and students are offered a tax credit by the government to help differ the costs of a college education. Whoever applies must fall within certain requirements to qualify for a reduction of up to $1500 on their federal income tax bill. The tax credits allow you to subtract dollar-for-dollar basis from your income taxes, by deducting the tax credit amount from your yearly income BEFORE taxes are calculated. This usually allows the applicant to save even more than the tax credit amount, since this may drop them into a lower tax bracket. The two Tax Credit programs are… MORE>
FINANCIAL AID & SAVINGS PLANS
Here are a few financial aid options. These are not to be confused with college or federal loans.
Educational IRA Account – This tax-deferred account allows you to contribute annually per child towards… MORE>
Roth IRA Account – A Roth Individual Retirement Account offers tax-free growth of vesting… MORE>
Section 529 Plan – Allows parents to purchase tuition credits and locks the future costs of college for four years… MORE>
Registered Education Savings Plan (RESP) – All funds and earnings in a RESP are tax-free until funds are withdrawn from… MORE>
Trust Accounts – In-Trusts and Formal Trusts have different requirements and allowances, such as… MORE>
Savings and Investment Accounts – Quick cash or liquid funds available for immediate needs and… MORE>
Custodial Accounts – Funds are a property of student and contributions are limited to… MORE>
Scholarships / Gift Aid/ Tuition Waiver – Most colleges across the country offer these types of financial aid, as well as many public organizations… MORE>
Registered Savings Plan (RESP) – This account allows all family members (parents, aunt, uncles, grandparents and so on) to contribute to… MORE>
LOANS & FEDERAL AID
Here are a few colleges or federal loan options. These are not to be confused with college financial aid.
Stafford loans -This is a federal loan (regulated by the government) awarded on financial need. There are two types… MORE>
Perkins Loans – These loans are awarded by the college’s financial aid office to… MORE>
Personal Student Loans – Most financial institutions like banks, credit unions and so on, will offer private education loans to… MORE>
College sponsorship – There are colleges all over the U.S. that offer their students loans so they can… MORE>
MISC Loans – There are many companies, persons, and organizations that offer loans (and scholarships) to students… MORE>
Federal Plus loans – These loans are available to the students’ parents and are based on the parents… MORE>
Student Loans – These loans are available to the students’ parents and are provided by financial institutions, such as… MORE>
College-sponsored loans – The college’s financial aid office will disperse funds to those that apply for the loan and fall within… MORE>
Federal Unsubsidized Loans – Neither students or parents will have to show need for these funds… MORE>
Home Equity Loan – Home equity loan or line of credit may be a great way to generate funds for college… MORE>
COLLEGE AND RETIREMENT
When saving for both retirement and your child’s education, you may feel a little overwhelmed and divided in interests. Though situations are different, most the time funding your retirement is the best route to take. For example, if you invested into a 401(K) Retirement Plan, you may be able to borrow up to half of the 401(K) Retirement Plan’s value for your child’s education expenses. This allows your money to earn higher interest rates than a normal savings account and receive any tax benefits at the time of deposit. Check with a financial advisor to make sure this plan is best suited for your needs and goals.
FINDING A FINANCIAL ADVISOR
A financial advisor can ensure you’re saving enough to meet all your immediate and retirement needs. Find out what’s best for you and your retirement goals! Learn more about the different asset allocation types, explore the areas above and fill out our online form to find a certified financial advisor in your area.
