Investing in a college education is one investment that pays off over time. Parents have various philosophies when it comes to paying for their child’s education. The average student graduates with more than $34,000 in debt. Many student loan borrowers often take more than a decade to repay their student loans which increases stress and impacts their quality of life as they are working towards establishing their independence as adults. Planning for education expenses now can help alleviate the stress of securing financing when the time comes for your child to pursue higher education. Lumena Financial Strategies can help you identify and develop actionable plans so you can start saving for your child’s future education today.
Selecting a College Savings Plan
As with any savings goal, risk tolerance, investment strategies, and the investment timeline should be considered. In addition, selecting the correct owner of the college fund is important as it may impact your child’s ability to qualify for financial aid funding in the future.
Several college savings plans are available through Lumena Financial Strategies, including:
- 529 Plans
- Custodial (UTMA/UGMA) Accounts
- Coverdell Education Savings Accounts
- Mutual funds
- Cash accumulation insurance products
Some parents and grandparents are unsure whether the child will go to college. Instead, they might choose to save in a traditional investment account then gift the funds to the student when they start college.