![]() Some options available include savings bonds, playing the stock market and the lesser-known 529 plans. To apply for financial aid, you’ll need to fill out the Federal financial aid (or FAFSA form) each year.įortunately, there are many options available to those looking to save for that college degree. The rest will have to be made up with financial aid, grants, and other scholarship funds. In fact, parents expect to help pay for 30% of their child’s higher education costs on average. Many families are putting their hope into scholarships and federal grants like the Pell Grant, but those grants have not been growing at the same rate as the costs to send your child to college. College costs include everything from tuition, to fees and living expenses. Parents of college-bound children are going to have to help pay for these rising costs somehow. By 2027 that figure is expected to be almost $12,500! ![]() In fact, nationwide in 2022 the average cost for one year of education at a 4-year public college in the United States clocked in at $10,940 for in-state residents. For example, Louisiana has had to deal with the worst increase of 106.9% while Ohio’s comes in at a much more reasonable 5.2%. These 10-year higher education inflation numbers vary by state. ![]() Higher education costs at both 2- and 4-year colleges and universities have been rising steadily over the last decade. ![]() Second – and by far the most impactful – is the uncertainty of how much college is actually going to cost once your child starts college. First, the fact that college is so far into the future makes parents feel like there is plenty of time left to start (hint: there isn’t). Starting to save for college seems like a daunting task to many parents of young children. Everybody knows that their children’s college tuition is going to have to be paid somehow by someone someday. Individual or Married: $3,200 with an unlimited carryforward Individual or Married: $4,000 with an unlimited carryforward Individual: $1,960 Married: $3,920 per year can be claimed with a 5% tax credit Individual or Married: the gift-tax exclusion amount Individual: $10,000 Married: $20,000 with five-year carryforward Individual: $2,500 Married $5,000 with 10-year carryforward In some states, you can use your 529 plan for K-12 education and get a corresponding income tax deduction.Īrkansas 529 plan: up to $5,000 if Individual, $10,000 if Married Non-Arkansas plans: up to $3,000 if Individual, $6,000 if Married Rollover contributions: $7,500 if Individual, $15,000 if MarriedĪ 20% tax credit on up to $5,000 per year can be claimed. Short answer: It depends on where you live. These costs go on your personal tab, not your 529.Ĭan I Use a 529 Plan to Pay for K-12 Education? Personal entertainment expenses: This includes everything from an off-campus gym membership to going to the movies or the bar.Semester dues or fees for campus clubs: This includes fraternities, sororities, sports, and other nonacademic clubs.Test and prep fees: The ACT and SAT official websites break down the current costs for testing, fees, and services.College application fees: Depending on where you apply, this can range anywhere from $30 to $90.Transportation: Instead, save money by leaning into carpooling, using public transit or campus transportation, and relying on your own two feet.This amount is limited to $10,000 for principal or interest payments on qualified student loans.Īnd here are a few expenses you can’t use a 529 plan for: The program must be registered and certified with the Secretary of Labor. (529 assets can’t be used to cover recreational activities, such as computer games that aren’t educational.)īooks, fees, and equipment for an apprenticeship program This expense must be used primarily for education. The student must be enrolled at least half-time.Ĭomputer, software, internet, and other computer-related expenses The services must be provided by the school. Special services for students with special needs This expense must be required for enrollment or attendance.īooks, supplies, and other school-related equipment
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