Tips to Curb Your College Costs

Posted by Busey Bank on Mar 1, 2021 2:25:35 PM
Busey Bank

As you prepare to send your student to college, you’re more than likely feeling the financial pinch—and for good reason. Whether your child is in diapers or in driver’s ed, you can curb rising tuition prices. Remember, the sooner you begin saving, the better. Even modest savings can add up over time.

2019-06_Busey Bank-Campus_Y7A1738

Consider a 529 Plan

A 529 plan is an indispensable tool to help pay for your child’s or grandchild’s education—offering a unique combination of benefits unmatched in the college savings world.

There are two types of 529 plans—college savings plans and prepaid tuition plans. Though each is governed under Section 529 of the Internal Revenue Code (hence the name "529" plans), college savings plans and prepaid tuition plans are very different college savings vehicles.

1. A College Savings Plan is a tax-advantaged college savings vehicle that lets you save money for college in an individual investment account. If your investment portfolio performs well, you reap the rewards—and vice versa.

With a college savings plan, you can:

- contribute at any time;

- use the funds at any college home or abroad (that’s credited by the U.S. Department of Education);

- and make withdrawals at any time – no age requirements.

2. A Prepaid Tuition Plan is a tax-advantaged college savings vehicle that lets you pay tuition expenses at participating colleges at today's prices for use in the future. You are guaranteed a minimum rate of return. Prepaid tuition plans can be run either by states or colleges. For state-run plans, you prepay tuition at one or more state colleges; for college-run plans, you prepay tuition at the participating college(s).

With a prepaid tuition plan, be aware:

- of select open enrollment periods;

- funds may typically be used only for undergraduate tuition at public colleges in your state;

- and tuition credits must generally be used by the time the beneficiary reaches age 30.

College planning is only one component of your financial picture. Prioritizing various financial goals—from college expenses to financial preservation and retirement is important.

Talk with the financial planning professionals at Busey Investment Services to determine the best plan for your unique financial situation.

Contact us today or call 1.800.67 | Busey

Topics: Personal, Student, Wealth

Join the online Busey community and leave a comment below!

Busey Bank knows Your Money Matters

Money Matters, a financial blog designed to provide insights, resources and tips from the financial experts at Busey, covers a variety of topics to help you realize your financial goals. Topics are focused on Busey's five lines of business—personal, mortgage, commercial, cash management and wealth management. 

New content is added regularly to deliver up-to-date information in today's evolving financial landscape. We encourage you to subscribe to Money Matters to ensure you don't miss helpful tips and how to's as they become available.

Subscribe Here!

Recent Posts