There is no magic, one-size fits all way to pay for college. The trick is finding what works best for your family.
It’s never too early or too late to save for college and other education expenses using 529 savings programs. Here are four tips to add a little holiday cheer to your 529 savings accounts. In addition to saving for college, 529 plans can now be used to pay for some elementary and secondary school expenses, $10,000 worth of student loans, and certain apprenticeship programs.
In the 1990s, Congress passed legislation to create 529 college savings programs to help families create a nest egg for college. With terrific tax benefits and lots of flexibility to move money among beneficiaries, an estimated 15.7 million current account holders have saved more than $480 billion.
May 29th (5/29) is National 529 Day and by extension May is frequently known as 529 Month, both great reminders and opportunities to save and invest for college. But remember, as May comes and goes, every month is a good time to save for college. Getting started, saving systematically (month over month), and putting time on your side are the keys to achieving your college savings goals and fulfilling your higher education dreams. Even small contributions made consistently can make a big difference over time and reduce your reliance on borrowing.
Regarding college expenses, today’s environment is much more multidimensional than the old maxim of “a dollar saved is a dollar earned”, as many utilize student loans to cover the rising cost of higher education. Having to borrow becomes a much more costly endeavor long term, whereas savings is a more attractive option. For example, saving $100 per month averaging a 4% rate of return compounded annually over 18 years would produce about $31,437.
There are many benefits provided through a 529 plan making it a go-to option for college savings. Here are some key reasons why so many families choose the 529 as a savings vehicle for college.
Parents, take advantage of this huge opportunity to increase college savings with free cash from Uncle Sam!
The government is now sending eligible parents cash each month. This free money can supercharge a child’s college savings nest egg and reduce future student loan debt. As MyCollegeCorner likes to say: “Saving a dollar today is better than borrowing one tomorrow®"
However - and this is a BIG however - you can do both. Setting up a college savings account alongside your retirement planning will benefit the whole family. You will give your child a great start toward college while you concentrate on building your nest egg for retirement.
Saving and paying for college can be a daunting task- but it doesn't have to be.
Many grandparents want to help their grandchildren achieve their dreams of college. Unfortunately, how grandparents save or offer assistance can unintentionally reduce a student’s eligibility for financial aid. Knowing some of the rules in advance will ensure that a grandparent’s good intentions are fulfilled without penalizing the student.
If you are a grandparent (or soon to be one) here are a few things to consider when planning to help save for college.