Should You Pre-pay For College?

You can prepay for a college education, and save a little money too

The cost of education might seem high, but it is a necessary cost in today’s world Those without college educations often face a hard time finding a job today Jobs you would never think would require a college education, do For example, there are many cowboy jobs — you know, riding a horse and doctoring cattle — that require you have an animal science or ag degree Firefighters have four year degrees At the least, many management positions, even in retail, require that you have an associate’s degree

College tuitions are just going up and up every year Increases are necessary to keep the level of education and boarding up to standard Education is not cheap and it costs a lot to produce it You can choose to pay tomorrow’s college at today’s tuition, tax-free

Sounds too good to be true, but it isn’t With an Independent 529 plan, you aren’t simply working with a state-sponsored savings plan Independent 529’s are offered by private colleges and universities

You simply deposit up to $165,000 into the plan In return, you receive tuition vouchers good for use at any of the plan’s 255 participating schools and universities You can use the vouchers between three and 30 years after purchase

The benefit is that the actual cost of tuition will probably be at least double what it is today when you redeem the vouchers Think of it as locking-in today’s college tuition prices Basically, you are pre-paying for an education

The drawback is that the vouchers must be used at participating schools If your child or grandchild enrolls at a school not on the list, you can get a refund at the rate your money was invested You can also roll the assets into a state-run 529 plan

State-sponsored 529 plans put your money into mutual funds or other investments that grow tax-free You then can use the account to pay for any college tuition in the country

Tuitions vary by school, so you will have to rely on the plan to let you know how many classes you are owed by the plan You are also limiting the growth of your money to the rate of tuition increases While tuitions have reportedly risen by 6% a year, there is no guarantee that they will continue that rate However, most people agree that college tuition rates will probably never go down You are basically risk free from losing money here

Once you have saved for retirement, saving for your children’s college educations is important Do this for them, and you give them a step onto the right path Research both traditional and independent 529 plans Decide which is right for your family and use it to your advantage Start saving as early as you can It is the perfect answer to “What does she need for her birthday?” After all, they are ready for college before you know it

Martin Lukac represents http://wwwRateEmpirecom and http://www1AmericanFinancialcom, a finance web-company specializing in real estate and mortgage rates We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more Find low home loan mortgage interest rates from hundreds of mortgage companies! Article Source: http://EzineArticlescom/?expert=MartinLukac

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