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If you are like me, you are concerned about your child's education. You probably spend countless hours helping your children with homework, encouraging good study habits and developing your child's natural skills and talents. Most likely, you consider this time well spent, perhaps even an investment in your child's future. And I agree with you, it is and investment. But with all this time helping your child, don't neglect to spend a few hours putting together a college savings plan. So while your child is developing good study habits, you should get to work developing good savings habits because although the number of students attending college is rising, unfortunately, college tuition costs are also rising, and at record levels. According to the collegeboard.com , by the time a child that is born in 2005 reaches college age, the cost of tuition will reach nearly $200,000 for a public school education. Are you ready for that? What are the best college savings plans? What can you do now to get start on a college savings plan? A recent development in college savings plans is the 529 Plan. The 529 plan is a state-operated investment plan that offers families a federal tax benefit for saving money for college. Congress authorized the 529 college savings plan in 1996. These college savings plans are officially known as qualified tuition programs (QTPs), but are commonly referred to as "529 plans," "state 529 plans," or "section 529 plans" because that is the section of the IRS code that provides the plans' special tax breaks. These state-sponsored programs were created to encourage families, particularly those with modest incomes, to save for their college needs and to reduce the amount of debt such as student loans that are used finance college educations. The use of 529 plans has become popular for families saving for a child's college education for good reason. Though the plans differ from state to state, all 529 college savings plans are exempt from federal income tax. The opportunity to save pre-tax dollars can provide a real boost to your college savings plan. There are two types of 529 Plans--prepaid tuition plans and college savings plans. All 50 states have at least one of these two plans available and many states offer both. Prepaid tuition plans allow you the opportunity to lock-in future tuition at in-state public colleges at current prices. College savings plans let you use your 529 plan funds for college expenses at any college. Be sure and get the facts about each plan and get started on a college savings plan today. Additional college savings information can be found at:
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College Savings Plans
