If you’re trying to figure out how to afford your child’s higher education costs, you’ll want to make the most informed decisions possible. One of the best places to start is a 529 College Savings Plan which are state-sponsored, tax-advantaged savings accounts that can be used to pay for qualified college costs—meaning tuition, fees, room and board, textbooks and even necessary technology.
Similar to a Roth IRA or Coverdell Education Savings Account, money you contribute to a 529 will already have been subject to federal income tax, but once inside an account, the funds grow tax-deferred. When the money is used for approved expenses (such as the items listed above), both your contributions and the gains come out tax-free.
For a long time, those using 529 plans were completely powerless to alter their investment more than once a year. But that is about to change thanks to a bill recently signed by the president that will allow investment holdings to be adjusted up to twice a year.
“Increased investment direction helps parents respond more effectively to market volatility,” the College Savings Plans Network says. This change will relieve some of the frustration investors feel when dealing with the ups and downs of the stock market.
Preparing for college may be daunting, but the informed parent can save THOUSANDS of dollars by saving and planning ahead. Private student loans are available to fill the gap once you’ve exhausted all of the free and low-cost options such as grants, financial aid and scholarships.
West Community private student loans are affordable with flexible repayment options. Nearly 2,000 schools across the country qualify, so if your kid needs additional funds for education-related expenses, check the map!
And remember, it’s NEVER TOO LATE TO SAVE!