Paying for a college education is not a walk in the park. If you have young children, know that by the time they attend higher education, the cost will be astronomical. This is a scary and daunting thought. Sometimes I worry that my child won’t get the same education opportunities as I did because there just isn’t enough money. I am dedicated to prevent that reality from occurring. There are many different ways in which to pay for a child’s college education, and I am on the hunt for the best one.
One of the most traditional ways to pay for a college education is with student loans. These loans usually have a low rate desirable for young students. However, student loans come with one major problem: a financial burden. When your child finishes with school he/she will be strapped with a large loan before even beginning to work it off. Student loans are definitely the way to go for some families, but there are other options for families that want to alleviate this burden.
College Savings Programs
Beginning from a child’s birth, parents are able to open a college savings program. Usually money is taken out each month over the course of the child’s life tax-free. However, when the child reaches college age, the money must be used for college or else they risk receiving a large penalty. College savings plans are meant for nothing else. If you are certain your child will attend college after high school than these plans may be the right option for you.
There is a type of life insurance plan that can be used for two reasons: life insurance, and a savings plan. The money you put into the life insurance policy each year accumulates at a high interest rate. Than at college education time, it can be used to help pay for the expenses. This may sound like a strange way to pay for college education, but it is very possible. As a matter of fact, the money saved in a life insurance policy does not have to be claimed on any student loan document. It is as though it never existed. The one downfall to this type of savings plan is that your money does not entirely go to you. For instance, your monthly premium on the life insurance policy only has a certain portion that goes towards the savings plan. The rest is considered a traditional premium.
Many states have special programs that give their residents great deals on college education. For instance, there are some states that allow parents to pay for their child’s tuition when they are an infant. This lets parents bypass the many tuition hikes that can occur within 17 years. Then, the child can attend that university when he/she is college age at no additional cost. There are other states that have different savings methods. Contact your local universities to see if there is a special college education program for your child.
Although paying for college education is and will be a challenge, it is not impossible. If college were impossible to pay for, no one would attend. This country will not let that happen. Make sure you do everything you can to prepare yourself and your child for the future cost of their college education.