Investing for College

It takes careful planning and a disciplined investment approach to afford the escalating cost of a college education. The key in saving for college is to start early, since time is the greatest advantage you have to ensure that the funds are there when you need them -- whether it's five years or 18 years down the road.

There are clear steps you can take now:

• Identify how much a college education is likely to cost when your child is ready to attend. You'll need to target a specific school or type of school and estimate the average costs for tuition and fees, as well as additional expenses for a two- or four-year program.
  
• Start as early as possible and invest regularly, either monthly or annually, to ensure that your child's college fund continues to grow and compound over time. Automatic Monthly Investing can be a great asset in reaching college savings goals.
  
• Remember that financial aid is available in the form of government loans, grants and scholarships and may provide an alternative way to fund your child's education, if you qualify.
  
• Consider investing in a Section 529 Plan.  These state-sponsored college savings plans allow you to make contributions into an account to pay those future costs. 529 Plans offer tax advantages to both the account owner and the beneficiary since no income taxes are paid on the earnings if the money is withdrawn for qualified educational expenses. Every state has instituted at least one plan and there are many sources on the web for more information.

This section is designed to help you learn more about investment vehicles appropriate for college savings, as well as help estimate the potential costs of a college education so you'll be able to make plans to meet those future expenses.

No matter which approach you take, the key to being able to afford college for your children is to start now.

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