BMI Federal Credit Union
Make College Attainable Through Saving
September is College Savings Month and a good reminder that it is never too late to start saving! While there are different thoughts on how much you should save, putting money aside now can help reduce the burden of the cost of education. The following are tips on how to save for college and ways to reduce the cost.
1. Help your child understand that college credits can be earned during high school. Students may be able to earn college credit through Advanced Placement (AP) or similar courses. Another way high school students can earn college credit is through dual enrollment in a local community college.
2. Students can consider taking core classes at a community college first, and then transfer to a four-year school to help lower the total cost. The price per credit hour at a community college is typically less expensive than at a university.
3. A 529 plan is an educational savings fund that provides tax-free earnings and tax-free withdrawals on qualified expenses. In addition, 529 plans can be used for student loan repayment, but only up to $10,000 per beneficiary on qualified student loans. Visit CollegeAdvantage.com to learn about Ohio’s 529 plan and find more information on how you can use it, investing options, and more.
4. Make it easy to save. If you don’t have a lot now, start with small contributions and build it up over time. (Most states allow you to open a 529 plan with just $25 and there are no annual limits.) Avoid the temptation to spend the money elsewhere by setting up an automatic bank transfer and include college savings as part of your budget.
5. When helping your student apply for colleges, don’t miss the opportunity to complete the Free Application for Federal Student Aid (FAFSA). The FAFSA may provide aid that you do not have to pay back including college scholarships, grants, and work-study funding.
6. Open a savings account for your child and help them learn the valuable skill of saving. Each time they receive money, doing chores or as a gift, have them set aside a portion of it towards their future education. You can also invite others to help save. Encourage family members to make contributions to a college savings fund instead of giving money or gift cards for birthdays and holidays.
It is never too early, or too late, to start saving for college. An education is the most valuable asset an individual will acquire in their lifetime and saving now can make college, or any post-secondary education, more attainable.