by Tenielle Shallman

If you are beginning to plan for future college expenses or if your child will be starting school this fall, here are some thoughts for your consideration.

Start planning as early as possible. Consider what your family will be able to contribute to your children’s education. Is your goal to fund a portion or 100% of the expenses?

As hard as it may seem, estimate what the cost to attend college might be. Once the approximate cost is known, you can determine what amount may be necessary to contribute to a savings plan on a monthly or annual basis to meet your funding goal.

Consider contributions to tax-advantaged “529 Plans,” also known as “college savings plans.” All earnings are accumulated tax-deferred and are tax-exempt if withdrawals are made for qualified higher education expenses*.

As students begin to search for schools, they should also consider researching and applying for scholarships and grants. School counselors, college financial aid offices, and the Internet can be helpful resources in terms of finding financial aid.

If current cash flow and available savings are not enough, you can apply for financial aid. Eligibility for need-based financial aid is calculated based on the cost of attendance and the expected family contribution. Once the need is determined, you may be awarded a combination of different types of aid programs.

Equity in your home may be another viable funding mechanism. Current interest rates are favorable and, if certain conditions are met, the interest may be tax deductible.

Additional funding sources that may be utilized are life insurance cash values, withdrawals from traditional IRAs if used to pay for qualified education expenses, loans from qualified employer plans, and other investment programs. Please consult with your advisor prior to implementing any of these strategies. To learn more, please contact your Wealth Enhancement Group Team.

*By investing in a 529 plan outside of the state in which you pay taxes, you may lose tax benefits offered by the state’s plan. Withdrawals used for qualified expenses are federally tax-free. Tax treatment at the state level may vary.