Save on College Expenses

College is an expensive proposition. Families wonder how they will be able to fund their child’s education. If you have multiple children, the worry is even greater. Here are some ways that you can start saving now for college even if your child isn’t a young child.
It is best to start saving for college early but that is not always possible. When finances are tight it is hard to set aside money for college, let alone a rainy day. But, savings build upon savings and even a little bit here and there add up to a large contribution.
All students are encouraged to apply for federal financial aid. Millions of dollars in loans, grants, and scholarships are awarded each year to college-bound students. While you won’t know in the fifth or eight grades whether your student qualifies for federal aid, you can start a savings plan of your own.
Consider investing in 529 plans. A 529 plan is a tax-free savings plan that is used to fund educational pursuits. A parent can open up the plan and make regular contributions. The contributions are then invested by the plan administrator into stocks and bonds as the owner of the plan has instructed. Your money earns you money for your child’s education.
Each state has its own 529 plan. Any family member can start a plan in the name of a student. When the student is ready to go to college, the money is available for education-related expenses such as books, tuition, room and board, and living expenses. The money can be used for undergraduate and graduate education.
One thing about a 529 plan is that it can be rolled over into a plan for another student. Say student "A" finishes school and there is still money in their 529 plan. Student “B” who is a sibling can use the excess and combine it with their own to pay for their college education. UPromise is an example of a college saving plan of this type.
There are also pre-paid tuition plans. With one of these plans, a student pretty much knows where they want to go to school. The price of the tuition is locked in at a certain amount. Parents buy tuition credits that can be used for tuition and fees.
Each credit is representative of a certain amount of the tuition. As many tuition credits can be purchased as you want. Additional packages can include credits for other things like books and room and board. You make installment payments on the credits.
Be sure to read all of the fine print with these plans. Pre-paid tuition plans may have an enrollment period and could be restricted by an age limit of the student participant. These plans are also referred to as independent 529 plans because they are offered by private institutions. The participating institutions do limit your child’s selection of a college but if they are pretty sure of their choice it can be a good thing.
These savings plans are not the only way to plan for college but they are a good step in the right direction. Check them out today to increase your options for college.