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College Saving Plan

Happy College Student

How do you pay?

According to the U.S. Department of Agriculture, in 2013 it cost a middle-income couple $245,000 to raise a child until 18 years old, and this does not include college costs. The big bill comes when your child goes to college. 
In 2013, four years of tuition cost $129,700 in private college while it cost $38,300 in public school. In 2031, the tuition & fees will cost $312,200 in private college. It will cost $92,200 in public school.  How do you pay for that? Pay out of your pocket?  Get loan? Federal student Aid? Or have a 529 plan?              

U.S.529
Saving Plan

With a 529 saving plan, parents can open an account and choose an investment strategy. The money put in is not an exam to Federal income tax, but some states allow a certain amount of them put in is free. Potential earnings accumulate tax differed, and you can make tax-free withdrawals to pay for eligible expenses, such as tuition, books, room, and board.

529 is a state-sponsored college savings plan but open to non-residents. Thus, parents can choose the best plan to meet their financial goals and needs. However, if the kid decides not to go to college, the parents can transfer the fund to another family member for college, Otherwise, the fund is subject to regular income taxes plus a 10% penalty on gains. There are two major types of 529 plans: 529 tax advantage and 529 prepaid plans.

529 plans affect a family's eligibility for financial aid because it is considered an asset. 
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