State Funding For College

2006-08-25

There are a number of funding sources available from states that can allow students to attend college. There are advantages and disadvantages to these methods of attending school, and we will explore them more in this article. One form of funding that is offered by many states is called the 529 plan. The 529 plan can allow families to save up a maximum of $300,000 for each of their children. In addition to the contributions that are made by parents, grandparents and other family members can add money as well. When the money is withdrawn, it will not be subject to taxation, which is a powerful advantage.

However, there are a number disadvantages to the 529 plan that should be noted. These plans may come with large fees, and there is no guarantee that you will receive a return on your investment. It is possible for 529 plans to lose money. Before you use them, it is important to weigh your options carefully. Another form of state funding that is available for students is called the prepaid tuition plan. The prepaid tuition plan will allow parents to purchase a contract that will allow you to lock in a specific tuition amount for specific colleges and universities. There are a number of obvious advantages to this.

First, you will not be subject to the rising cost of tuition due to inflation. This combined with your savings can put your child at a powerful advantage when they are ready to attend school. You are also protected in the event that the stock market crashes. However, it should be noted that these plans are limited to citizens that live in certain states, and some states do not offer prepaid tution plans at all. It is important for parents to do their research to find out if these plans are offered in the states they reside in. Another state funding option for those who want to attend college is called the education savings accounts.

Continue to Part 2 of State Funding For College

Related Articles:
» Benefits of Section 529 College Plans
» 529 College Savings Accounts

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