The price of a college education is growing at an inflation rate higher than any other public or private
economic sector in the United States. Parents often wonder if they will have enough saved up to cover the costs
of their child's college or university education. However, the federal and state governments do give parents
options for saving for their child's future college education.
The first option is United
States Savings Bonds. It offers a fixed interest rate for the life of the Savings Bond (since 2005). In
some cases, it might be tax free when a series EE or I Savings Bond is redeemed if used for college tuition and
lab fees, but it is dependent upon your income.
Second, most states offer a college savings plan or 529 plan. In some cases, it might be tax free
depending on how the state set up the college savings plan. In some cases, you can contribute as little as
$15 to $25 to start. The state government website should should offer more information, and it can be located
via Google.com or Yahoo.com.
If money is tight, Upromise.com offers a college
savings plan based on your store purchases or services utilized, or it can also be used to supplement your
college savings, too. In addition, there is an option to link up your existing debit or credit card to
add additional money. You can link or open a 529 savings plan (in a limited number of states) or even link
up your college student loans.
Finally, some mutual fund or stockbroker firms offer 529 or college savings plans. Please check with the
individual company for more details before joining or starting an account.
The best time to start saving money and planning for college is when a child is young. However, it is never
too late to start the savings process even if the child is a teen. One caution is to talk to your tax advisor
for guidance before setting up your child's college savings plan.
