The prospect of paying for higher education can be intimidating, especially as costs continue to rise, but you may be surprised at the difference you can make by saving regularly. The more you save and the earlier you start, the better.
Where to Save
You don’t have to choose just one way to save. Some families find that one college savings plan – like the U.Plan – meets their needs. Others combine the U.Plan with other tax-advantaged college savings programs. Make the U.Plan part of your college savings strategy this enrollment season. It’s a predictable, flexible and tax-free way to save for college.
How Much to Save
Even if you can’t save enough to cover the entire cost of college, don’t let that stop you from saving something.
It only takes $300 to start saving in the U.Plan, but if you can, contribute more. The power of the U.Plan lies in the lock on tuition. Why not pick one of the participating colleges that you think your child might attend and contribute enough to lock in 5% or 15% or more?
Think about saving for all four years that your child will be in college by designating more than one maturity year for each Tuition Certificate, and/or by contributing to the U.Plan year after year. Your savings will accumulate and your percentages will add up.
You may designate a Tuition Certificate for just one maturity year or for up to five different maturity years. For example, if you choose your child’s expected freshman, sophomore and junior years as maturity years, you can use that Tuition Certificate in any of those three years once they have matured.
Find out when your child will be in college
College Savings and Financial Aid
While assets such as savings accounts are considered when determining financial aid, in most cases they have little effect on your eligibility. Income is by far the biggest factor taken into consideration when calculating a family’s contribution to college costs.
Though you may think scholarships and loans could help later, the most important way to prepare for the cost of college is by saving now.
