Terms of Use If you're good at planning ahead, you may have thought about it before your child was even born, perhaps while you were shopping for a bassinet and teddy bears. At any rate, you probably started thinking about it when your child was very young. After all, it's one of the major responsibilities you face as a parent: your child's college education. Personal growth and expanded horizons are reason enough to send a child to college, but there are more practical considerati  More...

Terms of Use Consider that the majority of all college students receive some form of financial aid. Some tips to maximize the financial aid you and your student receive: Try to avoid putting assets in your child’s name Reduce your income Detail any financial hardships Have your child become independent As a general rule, education funds should be kept in the parents’ names, since investments in a child’s name can impact negatively on aid eligibility. For example, the rules  More...

Terms of Use Contributions to a Coverdell ESA are not tax deductible. Money invested will compound tax-free and remain untaxed upon withdrawal. If the distribution from an ESA does not exceed the beneficiary's qualified education expenses, then no federal income tax will be owed. If the money is not withdrawn by the time the beneficiary turns 30, it must be distributed to the beneficiary, who will then pay a 10% penalty on the distribution. One exception is that the proceeds can be transf  More...

7 Terms of Use You have several alternatives for saving for your child's -- or for your own -- education. The table below gives you a quick way to compare your choices. Feature The 529 College Savings Plan (not prepaid tuition) Custodial Accounts for Minors (UGMA/UTMA) Coverdell Education Savings Account (AKA Education IRA) Part of Parents' Savings and Investment Accounts Guidelines for Use of Assets Qualified Expenses C an be used for qualified higher education expenses, within limits  More...

Terms of Use While paying for college may seem a daunting task, help is available from the state, the federal government, colleges, private scholarships and grants, and other lending sources. To apply for financial aid, you must first complete a “Free Application for Federal Student Aid” or FAFSA. You can get a FAFSA through the U.S. Department of Education, colleges, libraries or on the Internet at FAFSA ® Application | Federal Student Aid . FAFSAs are accepted for the upco  More...

Terms of Use The costs of colleges and trade or technical schools vary widely. It can cost as little as $200 or as much as $30,000 or more per year. College costs: According to the College Board, here is the national average costs for 2022-2023: Basic tuition and fees: the amount of money that a college charges a student each year to enroll and receive instruction, plus other amounts a college requires a student to pay (such as athletic fees, social-activities fees, and health-care costs). F  More...

Terms of Use 529 plans are one of the more popular options for families saving for their child's college education. Although the plans do differ from state to state, they are all exempt from federal income tax, giving you a real boost to your college fund. What is a 529 plan? A 529 plan is a state-operated plan that gives families a federal tax-free way to save money for college. Specific plan attributes vary by state but all have several common features. What are the two types of 529 plan  More...

Terms of Use Many colleges require the SAT (Scholastic Aptitude Test) for admission because it is a standard way of measuring a student's ability to do college-level work. Because courses and grading standards vary widely from school to school, scores on standardized tests, like the SAT, help colleges compare your academic achievements with those of students from different schools. Remember, too, that colleges look at other things when making admission decisions -- like your high school reco  More...

Terms of Use Earnings on distributions not used to pay for the beneficiary's qualified education expenses are included in the beneficiary's taxable income and subject to a 10% tax penalty. Qualified education expenses are for primary, secondary, and postsecondary education expenses, including tuition, fees, tutoring, books, supplies, related equipment, room and board, uniforms, transportation and computers. The balance of the account must be distributed within 30 days after the benefi  More...

Terms of Use Yes , anyone can contribute to a Coverdell Education Savings Account on behalf of the designated beneficiary. You do not have to be related. You can make a contribution to a Coverdell Education Savings Account as long as your income does not exceed these MAGI limits: In 2023: $220,000 (married filing jointly) $110,000 for other filers Income phaseouts start at $190,000 (married filing jointly) $95,000 (other filers). There can be multiple savings accounts established for  More...