Effectively Save for College
*adapted from FDIC Consumer News
Investing in a college education can be one of the most important decisions an individual and a family makes. But, it is also a known fact that college educations are not cheap. The U.S. Census Bureau reports that on average a college education could earn a graduate up to 60 percent more than a non-graduate, making it an irreplaceable asset. As budgets for higher education continue to increase across the country, saving for college becomes an even more daunting task. However, there are some manageable ways to put some money aside before its time to start applying to colleges.
Begin planning and saving as early as possible. Luke W. Reynolds, Chief of the FDIC's Community Outreach Section states that an effective way to minimize the sticker shock of a higher education is to begin planning and saving as early as possible after a child is born.
Estimate the cost of your college education. Because estimating the future cost of an education may be challenging and complex, there are several online calculators to aid you in the process. The U.S. Department of Education offers a college calculator at
www.studentaid.ed.gov under "College Savings Calculator."
Research saving options and what's best for you. Some college saving options come with incentives such as a significant tax refund, but no matter what option(s) you pursue, it is crucial to fully understand the associated risks, restrictions and any expenses prior to investing. A local financial advisor, like those at Skowhegan Financial Services can help you review options and design a customized plan to help you save for tuition and college expenses. These plans may include:
Section 529 college saving plans: Offered traditionally by state governments, 529 college saving programs hold many of the same tax benefits as Individual Retirement Accounts. These college saving programs are divided into two types; traditional savings plans and pre-paid tuition programs. Traditional savings plans involve contributing money into FDIC-insured deposit accounts or into investments while pre-paid tuition programs allow investors to lock in today's prices for future tuition at selected universities. Maine's 529 plans are known as the NextGen plans and you can pick information up at any branch of Skowhegan Savings and meet with a representative, or learn more online by visiting
http://www.nextgenplan.com/.
Scholarships and grants: As it gets close to graduating and choosing a school, research programs available to students who are outstanding academically, involved in community groups or other extracurricular projects. Many local organizations offer scholarships to offset the costs of tuition, books and other expenses to reward those with good grades and interest in various activities including sports, music, art, languages and many others.
Most parents want their children to lead a successful and fulfilling life, and young adults want the same; a sound education is a great way to achieve this. Looking for additional information from the Department of Education and the FDIC on saving for college? Check out
www.mymoney.gov/category/topic1/going-college.html.
