A college education is one of the most important parts of the academic life of a student. Maybe, it is a 3-year or 4-year college session. However, in some cases, there is a need for a good amount of money to pursue a college course. As one of the parents, you have to be financially prepared to help your teens for a college education. A thought-out and organized scheme will help you in saving money for your teen’s college life. Simultaneously, the students may also take steps to save fund for a future college education. Thus, they will easily be able to fulfill their dream.
Now, we have presented some tips for both the parents and students to save money for a college course.
Important Tips for parents
Education Savings Account
You may have heard of ESA, one of the college savings schemes. It helps parents in saving almost $2,000 every year. While you have more than one child, you can choose these schemes separately for them. It is a tax-free scheme. What is more, after saving fund for 18 years, your account would have a balance of $36,000.
This is another college saving scheme, helping the students in prepaying educational payments fully or partly. It is applicable whether the college is within their state or somewhere, outside the state. However, remember that the saved amount does not cover your board and room expenses.
Saving for College with 529 Plan
We have found it to be the best option for most of the parents. Basically, this scheme helps you in choosing the fund to be invested through your account. One of the best things about this option is that you can switch the name of the beneficiary to a different family member. When one of your teens prefer a different path other than a college education, you may use the fund for another child. There is no age-related or income-related restriction with this scheme.
With UTMA, you need to open your account in the name of your child. However, as a parent, you have to play the role of the custodian. While your child attains the age of 21, he or she would be able to manage that account. Now, the most advantageous thing is that you may use the amount not only for a college education but also for other purposes. Conversely, the negative fact is that the beneficiary has to wait until attaining the legal age.
Important Tips for students
Send application to get the scholarship
The eligible students have a chance to get free money. You will be able to have this financial gift by making some academic achievements. Your success in co-curricular activities would also help you to have benefitted from scholarships.
Do a job on a part-time basis
While continuing your study, you can be a part-time worker in a company. You can invest your earnings in college education. Thus, start searching for jobs for undergraduate students.
The above tips are helpful to both parents and students. Based on your budget, needs, and affordability, you can choose any of the stated options.