|Written by kp3028|
The goal of every parent or guardian or grandparent is to see that child succeed.¬† Success in life is often seen starting with that sign of achievement of a college degree.¬† As college costs rise, it may make it more difficult for young adults to afford college. It will take planning to that to cover the cost of that education.¬† Here are some pointers to help reach the goal.¬†
Step 1:¬† Investigate whether your state has a program that allows you to lock in the ‚Äėtuition costs‚Äô ¬†for college at a state school so that regardless of¬†how high¬† tuition costs become it guarantees that your child will be able to attend.¬† Don‚Äôt worry about whether your college student of the future may not want to attend a state school, if they don‚Äôt the money is still there to be used at the college of their choice, but it may not cover as much of the expenses.¬† Programs differ, but the goal is the same ‚Äď locking in future costs, with a commitment of monthly payments now.
Step 2:¬† Look into setting up a Coverdell Education Savings Account. Contributions can be made to this type of account up to $2,000 annually.¬† Money put into these accounts are not tax deductible, but the revenue does grow tax free, until it is distributed for use.¬† The beneficiary will not owe tax on the disbursements providing that the disbursements are less than the total expenses at the qualified institution.
¬†Step 3:¬† Discuss with your financial planner whether setting up a Uniform Gifts to Minors Act Account is practical. Money given to a minor can be placed in this account for use later.¬† It can be a way for grandparents to help with the future expenses of college.¬† Consult a financial planner you trust on this.¬† If this is set up make sure everyone who would want to help by giving gifts ‚Äėearmarked‚Äô for this fund know about it.
¬†Step 4:¬† Buy US Savings Bonds.¬† If you are unsure of to give that new born baby, or young child consider buying US Savings Bonds.¬† The redemption value is the face value, while the purchaser pays less.¬† Tax is paid on the bond at the time of redemption by the person redeeming it.¬† They may not be glamorous, but they will be practical some time in the future.¬† They are very easy to purchase and later redeem at any bank.
¬†Step 5:¬† Seek out scholarships from the school as well as Federal and private grants.
¬†Step 6:¬†¬† Research student loans.¬† Student loans have to be paid back. The more money you can have available that does not require repayment, means the less likely a default will occur.¬† A college education does not guarantee financial security, but it does give someone the best chance of getting a successful career off the ground.