“Helping your children finance their higher education opportunities may be one of the best and rewarding gifts you can provide.” Receiving a higher education degree at a traditional college or vocational school is proven to provide better employment opportunities and income potential.
Strategies to Pay for College
- Child can take Advanced Placement classes in High School to earn college credits
- Federal Financial Aid – Submit Free Application for Federal Student Aid (FAFSA)
- Child can work – Employment on campus, off campus, paid internships will provide income and work experience to put on their resume
- Scholarships – Apply for as many scholarships as possible, even the small ones add up
- Government Loans – Low interest loans taken out by students or parents
- Private Loans – Higher interests loans; only use if all other funding sources are exhausted
- Savings – Parents start saving at child’s early age and student start saving if employed
Ways to save for College
- Saving Now – Smaller monthly contributions as opposed to larger contributions in future
- Traditional savings or brokerage account – No tax advantages; no usage restrictions
- Prepaid Tuition Plans – Pay for future college now and lock in current prices
- ROTH IRA – Can allow for withdrawals to pay for higher education expenses
- ESA account – $2,000 contribution limit per year; funds are tax free if used properly
- Custodial Account – Parent controls account; child gains control at 18 or 21; no restrictions
- 529 savings plans – Most common way to save for college; qualified tax free withdrawals; high contribution limits; now allows use of funds for elementary, middle, and high school tuition