Wednesday, October 1, 2008

Saving Plans for College Avoid Student Loans

This week as the discussions began about Bush-McCain $700B bailout plan for Wall Street banks, several commentators have been highlighting that a credit squeeze would mean that it would become difficult to borrow money and get student loans for college tuition.

If you have very young children and want to ensure that their college education is paid for without difficulty, here are a few tips that will help you accomplish your goal:

1. Plan your pregnancy so that you are mentally and financially prepared to cope with the responsibility of having a child.

2. Start to save for your child's education from the day he/she is born. Both parents and grandparents can set aside $25-$50/month in a trust fund to mature when the child celebrates its 18th birthday or is accepted to college.

3. Research various savings plans, annuities or scholarship funds, such as a 529 plan.

4. Follow your child's progress as he/she starts school and get tutors or support to keep him confident and motivated.

5. Extra-curricular activities are important to help kids stay focus and challenged because they have to balance school with the other activities thus developing skills for life's many challenges.

6. There are certain tax benefits as the plan participant.

7. Each state now has at least one 529 plan available but it's each state's decision to offer plans and the structure so it's important to research the features and benefits in depth before investing.

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