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Funding A College Education
by Jan Lehrtl
http://www.faqeducation.com
Getting a college education today is more expensive than
ever. That is why it is important to start saving far
ahead of time. Many parents start a college education fund
shortly after a child~s birth. Others look to grandparents
to help fund this important life investment. If you have
children and do not yet have a college savings plan, now is
the time to start.
What is your risk-aversion? How much time do you have
until you need funds available? Where do you see your
child pursuing higher education? These are the kinds of
questions that must be answered when shopping for
investment vehicles. Decide whether you prefer a slow,
reliable, and no-risk option like savings bonds, or you
can tolerate the risk that accompanies potentially
high-yield investments delivering 20-100% returns per
annum.
Mutual funds are a popular option for education savings.
Many accounts can be set up to be funded through payroll
deduction every pay period. This makes for a hassle-free
transaction that happens in such a way that you aren't
likely to miss the money. Twenty-four such deductions
annually over eighteen years combined with leaving the
continually compounding interest in the account will help
that small monthly amount grow exponentially into a
healthy funding source for your child's college education
expenses.
Family and close friends could be encouraged to sometimes
give monetary gifts to your children rather than gifts of
other kinds. Younger children and teens aren't likely to
appreciate this, but they likely will when they see how
those gifts mature over time to provide them with more
educational options.
When your child is old enough, it may be a good idea for
him or her to take up a part time or a summer job to add to
their college fund. Even a job that takes about ten hours
a week will put about a thousand dollars in the bank
during a single summer (assuming a wage of eight to ten
dollars an hour over ten to twelve weeks), and still give
your teen time for any leisure activities he or she may be
interested in. If your teen in encouraged to make such
contributions, your teen is likely to be more serious
about college study and value it even more.
Are you still a little short on funds now that it's time
for your teen to go to college? It~s not too late
to apply for scholarships, grants, and loans. Have her
fill out the FAFSA form which will determine her
financial aid eligibility at all participating institutions
of higher education in case she transfers to another
campus later. This form can be readily obtained at the
college's financial aid office.
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