How to pay for college expenses
College is getting more expensive by the day and we feel that eventually this trend will change but for now it certainly has become the new normal. Here are some funding sources that we have used in the past in order to pay for college:
- 529 accounts or other college accounts that are similar
- Trust earnings
- Earnings from old money such as CD’s or investment accounts
- College loans (subsidized is better)
- Home equity loans
- Money that is currently in an IRA
- Cash value of life insurance
- Rental property income
Obviously there are many more ways to pay for college but this is just a short list. We also like to encourage parents to think outside the box when it comes to college. Many alternatives might exist that might allow your child to enjoy many of the benefits that college offers without all the expense.
As most things when it comes to financial matters; starting early and having a plan is always a good idea. Waiting until your child is 17 or 18 can make the choice rushed and difficult.
Disclaimer: Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.