According to a 2011 report from The College Board® the average tuition and fees for a public in-state university for four years is $33,300 and in 18 years that cost is projected to rise to $95,000. If you have young children or you are thinking about having children, now is the time to start thinking about how you and your child will cover these expenses when they are ready for higher learning.
In the U.S. student loan debt outstanding now exceeds that of credit cards and auto loans. To help ensure that your child or grandchild is not burdened with excessive student loan debt, consider opening a 529 college savings plan.
- You are not limited to 4-year undergraduate colleges; rather, trade, vocational, graduate schools and community colleges are all possibilities.
- It is not a use it or lose it proposition. You can use the money for your own education or pass it on to another beneficiary. Worst case, if you withdraw the money for non- qualified expenses you would pay income taxes and a 10% penalty on the earnings.
- As the 529 plan is considered your asset and not your child’s, it will only have a minor impact if any, on financial aid.