Preparing for a Brighter Future: How To Save for College
It’s no secret that sending your child to school has become more expensive through the years—and we’re not just talking about the tuition fees. Other expenses include lodging, transportation, books, food, and more. With all these in mind, it’s no surprise that Americans have accrued up to $1.75 trillion worth of student loan debt.
As parents, you may be wondering if there’s another way to fund your child’s college tuition besides applying for a loan. The ideal option in this situation is to start an education savings plan early. This way, you can pave a debt-free future for your child once they pursue higher education.
Now that you have a goal in mind, the next step is to figure out how to raise that money. If you’re just starting out, here are some helpful tips on saving for your child’s college funds.
Understand Your Options
Parents have a lot of options when it comes to raising funds for college-related expenses. There are financial plans that offer different terms and payment schemes to cater to specific financial needs. Some of the college financial programs you can apply for include:
Educational IRAs
This is a tax-deferred education savings plan that allows each student to save up to $2,000 per year. Parents can enjoy tax-free withdrawals for earnings that will be used for a child’s continuing education.
529 Plans
Like educational IRAs, 529 Plans are also tax-deferred savings programs with high contribution limits. Anyone who needs financial aid is welcome to apply since these don’t have parental income restrictions.
Pre-Paid Tuition Plans
This savings program allows you to pay for your child’s college tuition fee based on the current educational costs. To receive the full benefits, the student may only attend the schools included in the specific plan.
Encourage Kids To Take AP Classes
As early as high school, students can earn college credits through Advanced Placement (AP) programs. By enrolling in these classes, your child can skip the general education courses in freshman year. Taking these classes reduces the fees you need to pay for in college.
Apply for Scholarships and Grants
Just like saving, students should start applying for scholarships as early as their freshman year of high school. Educational consultants advise looking for local grants instead of national ones since there’s less competition. This increases the chances of receiving the financial support they need for college.
Open A Savings Account
To protect your hard-earned money, it’s advisable that you put it in a secure place. If you’re planning to open a savings account for college funds, you may do so at your trusted financial institutions like banks or credit unions.
At Firefighters Credit Union, we’re here to serve to the best of our clients’ interests. We offer a wide range of savings products to help you protect and make the most out of your investments. Contact us to get more information about our financial services.
