Paying for a child's college education is an expensive proposition – but not an impossible one. With an appropriate strategy, you can go a long way to meeting this challenge whether your child is still in preschool or already in high school.
If your child is young, establishing a savings plan now can put time on your side. Consider alternatives to the traditional savings account.
*The earnings portion of distributions that are used for non-qualified education expenses are subject to ordinary income tax, plus a 10% penalty.
The chart below provides an understanding of average undergraduate budgets for 2012–2013, which provides you a good overview of the many expenses involved in financing a child’s education. Sample Undergraduate Budgets (average), 2012– 2013
Tuition and Fees
Room and Board
Books and Supplies
Public Two-Year Commuter
Public Four-Year In-State On-Campus
Public Four-Year Out-of-State On-Campus
Private Nonprofit Four-Year On-Campus
NOTE: Expense categories are based on institutional budgets for students as reported by colleges and universities in the Annual Survey of Colleges. They do not necessarily reflect actual student expenditures.
SOURCE: The College Board, Annual Survey of Colleges. This table was prepared in October 2012.
If your child will be starting college within the next couple of years or has already started, there are still financing methods available for you to consider.
While it's best to get an early start, it is never too late to plan for the cost of your child's education. For assistance, call your professional financial advisor. He or she can help you plan today for your child's education tomorrow.
Mutual funds are offered by prospectus and 529 Plans are offered by an offering circular. An investor should carefully consider the investment objectives, risks, charges and expenses of an investment before investing. Read a mutual fund prospectus or an offering circular carefully before you invest. The investment return and principal value of an investment will fluctuate with changes in market conditions so that an investor's shares when redeemed may be worth more or less than the original amount.