By Emma Dylan
A college education is an investment in your child’s future. But with the rising cost of tuition, it can be difficult to know how to best use your money. Here are some tips for investing in your child’s education:
Start early
The cost of a college education has been rising steadily for years, and there is no end in sight. As a result, more and more parents are feeling the squeeze when it comes to paying for their child’s education. If you are worried about how you will pay for college, it’s important to start saving early. The sooner you start, the more time your money has to grow. Even if you can only save a small amount each month, it will add up over time. In addition, there are many ways to save on college costs, such as attending a community college for two years before transferring to a four-year school. By starting early and being mindful of costs, you can make sure that your child gets the education they deserve without breaking the bank.
Take advantage of tax-advantaged accounts
One of the best ways to invest in your child’s future is to start saving for their education early. Fortunately, there are a number of tax-advantaged accounts that can help you do just that. 529 plans are state-sponsored investment accounts that offer tax-free growth and withdrawals for qualified education expenses. Coverdell Education Savings Accounts are another option, and they offer tax-free growth and withdrawals for a wide range of secondary education expenses including private school tuition and tutoring. Both options provide a great way to save for college while getting a tax break, and they can help you give your child a head start on their future.
Use a 529 plan to pay for K-12 expenses
As mentioned, a 529 plan is a tax-advantaged savings plan designed to encourage saving for future education expenses. Contributions to a 529 plan are not deductible, but earnings grow tax-deferred and withdrawals are tax-free if used for qualified education expenses. Withdrawals from a 529 plan can be used to pay for tuition, fees, room and board, books, and other eligible expenses at eligible colleges and universities. 529 plans can also be used to pay for up to $10,000 per year in qualified K-12 expenses. Qualified K-12 expenses include tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible public, private, or religious school. Withdrawals from a 529 plan are subject to federal and state income taxes and may be subject to a 10% federal penalty tax if not used for qualified education expenses. Investing in your child’s education with a 529 plan is a smart way to save for the future and take advantage of tax benefits.
Get creative with scholarships
According to the National Center for Education Statistics, the average cost of tuition and fees for the 2017-2018 school year was $34,740 at private colleges, $9,970 for state residents at public colleges, and $25,620 for out-of-state residents at public colleges. With numbers like that, it’s no wonder that many families feel overwhelmed when it comes to saving for their child’s education. However, there are a number of ways to ease the financial burden. One option is to look for scholarships that your child may be eligible for based on their hobbies, interests, or ethnicity. For example, if your child is interested in playing tennis, you could look for scholarships offered by the USTA Foundation. If your child is of Hispanic heritage, you could look for scholarships offered by organizations such as the Hispanic Scholarship Fund. By getting creative with your search, you can help ensure that your child has access to the best possible education.
Work part-time during college
Many parents worry about the high cost of college and whether their children will be able to afford it. However, there are several things that parents can do to help their children pay for college. One option is to encourage them to work part-time during college. This can help cover living expenses and other costs not covered by financial aid or scholarships. In addition, working during college can also help students build job skills and experience that will be valuable after graduation. Moreover, studies have shown that students who work while in college tend to have higher grades and are more likely to graduate on time. Therefore, working part-time during college is an excellent way to invest in your child’s education.
Take out federal loans before private loans
When it comes time to pay for college, many families face a difficult decision: how to finance their child’s education. There are several options available, including federal loans, private loans, and scholarships. However, each option has its own set of pros and cons. Federal loans are typically more affordable than private loans, but they may not cover the full cost of tuition. Private loans usually have higher interest rates than federal loans, but they can be used to cover any remaining costs after scholarships and federal loans have been exhausted. As a result, families should carefully consider all of their options before taking out any loans. In general, it is best to exhaust all federal loan options before turning to private loans. By doing so, families can minimize their overall borrowing costs and ensure that their child has the resources they need to succeed in college.
Enroll your child in a college preparatory high school
By enrolling your child in a college prep school, you are investing in their future. College preparatory high schools offer rigorous coursework that challenges students and prepares them for the rigors of college academics. In addition, college prep schools often have strong relationships with colleges and universities, which can give your child a leg up when it comes time to apply to college. They also offer extracurricular activities and programs that can help your child develop important skills and connections. If you are serious about ensuring your child’s future success, enrolling them in a college preparatory high school in Salt Lake City is essential.
