You are here: Online Education » Education Frequently Asked Questions > Financial Aid > Saving for College > What could be some of my college education savings options?

What could be some of my college education savings options?

April 29,2010 by: Maxim Thomas

There are a number of ways on how one can prepare for college education. You can try to cut down on your expenses then set aside the cash that you were able to save but there would be better and safer way to prepare for the future.

We all know how expensive it is having a college diploma but if you start saving now then it would be easier sending your child or yourself to college. Here are few of the risk proof ways to save for you in preparation for college.

While finding some ways to save money, you’ve probably came across the 529 plan. This kind of plan is an investment sponsored by the state and grows tax. When the time comes that you already needed to make a withdrawal to pay off for the beneficiary’s educational expenses you don’t need to worry for it is tax free. You save from high taxes and you are able to prepare for your kid’s college- what else could you ask for?

One very popular 529 plan is the prepaid tuition plan. It is pretty obvious how this is acquired. You pay for the tuition ahead of your kid entering the college. The good side of this is that you get spared from any increase in tuition fees for you have already prepaid for it.

The Coverdell education plan or also called ESA. This kind of plan lets you save your money and all the money you’ve saved from the plan is tax deferred which means you don’t need to pay for your income tax. Under ESA, when there is an excess fund, it would then be distributed to the beneficiary when he or she reaches the age of thirty.

Your assets can help save money for your kid’s education. There is a way called the custodial account. A child is allowed to have some assets under his name at an age not ordinarily allowed to have assets. The money that could be acquired from the assets is what would be used for the beneficiary’s education. Since it is called custodial, an individual is assigned as a custodian of the assets and that could be the parent himself, a relative or a trusted friend.

The good thing about this kind of plan is that it does not only cover the education expense of the beneficiary but some other expenses in pursue of his or her interest and self-improvement.

See what best fits your needs and be prepared for college.

Comments are closed.