It’s a well-known fact that college can be expensive. When it comes to paying for college, student loans are not always the best answer. Those who take out student loans graduate college with an average of $25,250 in debt. Although it may be necessary to borrow some money to pay for college expenses, it is worth it to explore your other options.
The following tips are some different options to consider when paying for college:
A Roth IRA can help pay for college tuition, but it’s important to start early. One downfall, however, is that withdrawals from a Roth IRA can impact your nest egg.
Purchase a prepaid tuition plan
Prepaid tuition plans are good options for those planning on attending an in-state school. These types of plans can allow you to lock in today’s tuition rates for the future. Additionally, the value of the account can be transferred (or refunded completely) if there are ever any plan changes, such as the desire to attend an out-of-state or private school.
529 savings plans
These types of savings plans allow your savings to grow tax-free, and become exempt from federal tax entirely, if the withdrawals are used to pay for college expenses. This includes room and board, tuition, and other qualified college-related fees.
Similar to 529 savings plans, coverdells also cover the cost of private elementary and high school tuition.
Sell some or all of your future long-term payments for a lump sum of cash now
Peachtree Financial Solutions is a company that purchases structured settlement and annuity payments from people that would prefer to receive part or all of their money sooner in a lump sum. This money can be used for a variety of purposes, including paying for college. Whether you want to pay for tuition for yourself or a family member, contact Peachtree Financial Solutions today to learn more about how the settlement funding process works and to receive your free quote.
Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.