The price of attending college and getting a degree gets more and more expensive every year. In fact, the average annual price of college (this includes tuition, fees, room and board) now exceeds $35,000. You may be wondering, “How in the world can I save enough for college?” To help lessen the pain, the following are some ways to financially plan for college.
Most states offer tax-advantaged college savings programs in the form of 529 plans. Money from a 529 plan can be used tax-free to pay for qualified higher education expenses. Many states also give a tax credit for these contributions.
Prepaid Tuition Plans
Some states offer prepaid tuition plans. Although the number of states offering these plans are dwindling, check out this list to find out if your state offers them today. These types of plans allow guardians to prepay the cost of college tuition at the current rate. So, this allows the cost to be locked in and not change even if the cost rises in the future.
Many students (and parents) also take out loans to help pay for college costs. When thinking about taking on this type of loan, you should look at federal loans first. These loans, like the Stafford, have more flexible repayment options compared with private loans. Check on the government’s policies about loan forgiveness and debt payoff plans, because certain forgiveness programs are tied with certain professions.
Attend A Community College for the First 2 Years
Community college can be a much less expensive way to get general required courses completed. This can greatly reduce the cost of a college education!
What Not to Do
While most parents want to help pay for college expenses as much as possible, never borrow from a retirement account to do so. Many students learn life-lasting financial lessons by paying for some of their college expenses. Students also can take out a student loan, but there is no such thing as a retirement loan.
Yes, the price of college has skyrocketed! Take a look at some of the options listed above to help it lessen the pain your pocketbook might feel.
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