Today, we're going to talk all about saving for college. Next to retirement, this can be one of the most stressful and difficult things for which to save. However, you can start making plans now.
According to the College Board, during the 2016-2017 school year, an in-state resident could expect to pay about $9,650 in tuition and fees at public universities. For non-residents, that number rises to $24,930. For those attending private universities, they are looking at $33,480.
Fortunately, you can start saving for your child's education before they are even born. There are several options out there to make sure you make a plan that works best for you. Check out some of them below:
UTAH EDUCATIONAL SAVINGS PLAN
This is Utah’s version of the 529 plan, which is a state sponsored savings plan for a child’s college expenses. The money put into these funds aren’t subject to federal or state tax when they are used for post high school education. These funds can be used towards tuition, room & board, books, supplies, etc.
COVERDELL EDUCATION SAVINGS ACCOUNT
A Coverdell ESA is a trust created by the US government to help families fund expenses related to education for beneficiaries that are under 18 years old. The maximum contribution to this type of account is $2,000 per year, per student.
CDS AND SAVINGS BONDS
On Monday, we wrote about CDs, so you can find more information on those HERE. When used for higher education, Series I and EE savings bonds are exempt from federal income tax.
COLLEGE TAX CREDITS
Once your child is in school, you may be able to take advantage of tax credit. There are two different ways to reduce your taxes. The first is the American Opportunity Credit. This credit is available for four years worth of college education. The second is the Lifetime Learning Credit. There is no time limit for this credit and it can be used for undergraduate and graduate courses.