Eight Ways Parents Can Plan for Their Kids’ College

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The average cost of tuition and fees for the 2023–2024 school year was $10,662 for in-state residents at public colleges and a whopping $42,162 at private colleges. Yet, by taking a few key steps, you will find many practical ways to prepare financially for the college education of your children. These strategies can include creating a budget, exploring scholarship opportunities, saving early and understanding costs.

1. Open a tax-advantaged 529 plan

Engaging in a 529 plan, a tax-advantaged savings plan intended to encourage saving for future education costs, can be integral to your overall financial plan. Financial advisors can provide expert advice on whether this is a suitable saving plan for your circumstances. Named after section 529 of the Internal Revenue Code (IRC), this plan is sponsored by states, state agencies or educational institutions and provides a systematic approach to saving for college over time. Plus, you can now roll any unused funds over to a Roth IRA account after your child’s college is paid for.