Paying for Higher Education

Paying for college tuition nowadays can be extremely stressful. We all know that the cost of higher education is rising faster than the rate of inflation. However, the good news is, there are ways which can get your child to school.

Putting money away each month is a critical step in saving for your child's future education. For example, if $100 was saved each month, by the end of 18 years, you will have saved up around $48,000. It doesn't matter how much money you can put away each month.

Two of the most common investment plans are the CESA, or the Coverdell Education Savings Account. What distinguishes the CESA and other savings plans is that the funds can be utilized for K-12 education as well as higher education. Funds can go towards tuition, books, and other educational expenses. However, the money has to be saved up before the child turns 18 years of age. The good thing about this plan is that anyone can contribute to helping save for the child's education, including, family and friends.

Another popular savings plan is the 529 program. What exactly is a 529 Plan? The 529 Plans are a lot like the 401[k] Plans for college savings. They can either be in the form of prepaid tuition or just a savings plan. I think the 529 prepaid tuition plans are a smart thing to invest in because it allows parents to pay for their child's college tuition at today's price. The prepaid tuition can pay for private, public, or out-of-state schools. However, room and board are not included in the prepaid tuition plan. On the other hand, the 529 savings plans cover room and board for all higher education.

If you are interested in any of the two mentioned savings plans, I would highly recommend you to go speak to a financial advisor.

Of course, there are many other ways in which your child's future education can be paid for. They can apply for grants and scholarships, whether it be for being musically inclined, an athlete, or being a leader in their community by being involved. You, as a parent, are their outlet to finding their passions and hobbies. Sign them up to be in a sport or pay for them to go to a science camp! They may enjoy it and eventually decide to continue pursuing their new found hobby, with the possibilities of it bringing in a huge scholarship in the future. Furthermore, as your child becomes older, you should inform them about how much college tuition costs. This information may catapult them into thinking about getting a part time job to help save for their own education.