How can you properly fund your children's education without draining
your current cash flow? What should you do if they are a few years away
from college and your education fund won't be enough? How can you
increase your chances of getting financial aid? What tax benefits might
be available to you? This Financial Guide answers these questions.
Start Saving Early
College is expensive and proper planning can lessen the financial
squeeze considerably--especially if you start when your child is young.
Getting an early start on saving is basic to funding your child's
education. The earlier you start, the more you'll benefit from the
compounding of interest.
Find Out How Much You'll Need To Save
How much will your child's education cost? It depends on whether your
child attends a private or state school. According to the College
Board, for the 2018-2019 school year the total expenses--tuition, fees,
board, personal expenses, and books and supplies--for the average
private college are about $46,950 per year and about $20,770 per year
for the average in-state public college. However, these amounts are
averages: the tuition, fees, and board for some private colleges can
cost more than $70,000 per year whereas the costs for a state school can
be kept under $10,000 per year. It should also be noted that in 2018-19
the average amount of
grant aid for a full-time
undergraduate student
was about $6,490 and $21,220 for four-year public and private schools,
respectively. More than 70 percent of full-time students receive grant
aid to help pay for college.
Choose Your Investments
As with any
investment, you should choose those that will provide you
with a
good return and that meet your level of risk tolerance. The ones
you choose should depend on when you start your savings plan-the mix of
investments if you start when your child is a toddler should be
different from those used if you start when your child is age 12.
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