Mar 23, 2017 09:01 AM EDT
How Parents Can Help Save For Their Child’s Higher Education
Pursuing post-secondary education is expensive, and there is no way to deny it. And saving for that big chunk of an expense is even more difficult, for both parents and students.
For the academic year 2016-2017, the average college tuition already amounts to roughly $34,000 to $36,000, for public institutions alone, according to College Board. And that is seriously a huge amount of money, unless a student is coming from a family who does not have to worry about their next meals.
With these figures, most parents express their desire to help their children pay for their college education, but only one-thirds are confident that they can help with the costs of their child's education.
There are actually a couple of ways for parents to help their children without having to take drastic measures, and here are a few ways they can follow.
529 College Plan
The 529 college plan is an investment plan sponsored by a state government, and according to ABC KSAT 12, parents have an option to set it up in such a way that it will be tax free. Parents also have the freedom to choose on how aggressive they can be with the plan based on how old their kids are. It is advised that parents be more conservative if they have older children.
Prepaid tuition plan
Prepaid tuition plan can be an excellent option for parents who already know which college their children are attending. Once they have chosen a school, the plan allows parents to buy tuition credits at the current prices.
Roth IRA is something that parents can open under the name of their working children as a means to save for college. While the money cannot be withdrawn until the investors reach 59.5 years, certain expenses are allowed including education.
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