College costs continue to rise by 5-10% per year.  While many students qualify for scholarships, grants and other tuition offsets, the fact is that many state colleges cost $20,000 or more per year!  

A FANTASTIC option is a self-funded plan through which parents and grandparents deposit money in a TAX-FREE, flexible plan that can provide LOTS of money for ANY reason.  It can be used for college, a first home, starting a business, etc....Plus, you and the child are in full control of the money with NO penalties, withdrawal fees or limitations.  You can start a plan with as little as $50 a month.  Of course the earlier you start the better and greater deposits build up more cash in the plan. 

NOTE:  No matter how you chose to fund your child's education, look at student loans to offset some costs.  In most cases, these are not paid back nor do they incur interest until after graduation so it is like a FREE four year loan!

Compare our plan with some of these ways people fund college costs including:

Student Loans:  There are different types of student loans that provide good options.  However, does it make sense for a 23 year old college graduate to be faced with a loan balance of $40,000-$100,000 or more? 

Parent/Student Loans:  Many parents co-sign loans with their children.  This can be a bad decision based on the above information as well as the fact that parents would be liable for the balance if the child defaults.  

Cash:  Not many people have or can afford $80,000 or more for a four year education.

Retirement Savings:  It is not uncommon for parents to rob their retirement accounts.  Where will this leave them as they get closer to retirement?  The money is often taken out of retirement plans that charge withdrawal penalties and fees so the costs are even higher.  

529 Plans:  On face value, these look like good plans.  However they can have many restrictions including:  1) Most 529 programs are invested in stock-based plans that can lose money (remember 2003 and 2008 stock markets). 2) You cannot buy your child a car for college or pay for other "non-direct" expenses associated with attending college.  3) If your child gets scholarships and does not need the money, it can be an issue getting the money back without tax implications or penalties.  4) The balance in the account counts against your child when applying for financial aid. 

Let me know if you would like more information on how to set up a TAX-FREE, flexible, college savings plan that can NEVER lose value due to market volatility: