With the holidays upon us, children everywhere are putting together their Christmas wish lists for Santa. While the latest video gaming system and cutest doll may bring a smile to their faces on Christmas morning, just imagine the smile on your children’s or grandchildren’s faces when they graduate from college with little or no student loans to pay back.
With the rising cost of tuition, starting to save for college should not wait.
According to the Wisconsin State Treasury website, with an average tuition inflation rate of 8 percent each year, a child born today will pay $170,000 for college at a public institution. While that figure may cause you to panic, it is never too late to start saving. Providing your child with any assistance, even partial tuition, can help alleviate the financial burden after college. In Wisconsin, state-sponsored college savings plans include EdVest and tomorrow’s scholar. These plans offer a structured way to save for college, while providing possible tax benefits for you and your beneficiaries.
Both state-sponsored savings plans allow you to open an account on behalf of a designated beneficiary. The money is placed in a trust fund established by the state and overseen by the Wisconsin College Savings Program Board. Earnings grow federally tax-free and qualified withdrawals are potentially federal and state tax-free. In addition to the tax advantages, the funds are professionally managed, can be used for a variety of educational expenses including tuition, books, fees, room and board, and they offer flexible options to start contributing. An EdVest account can be opened for as little as $15 per month and tomorrow’s scholar with as little as $25 per month when you set up an automatic monthly investment.
While your children or grandchildren may not be able to appreciate the gift of a college savings account at The Children’s ISA, they will certainly thank you later.