If you’re a new parent, you’re probably more concerned with getting a good night’s sleep than with how you’re going to put your new bundle of joy through college. But if you start saving now, you’ll be better prepared for the high price of higher education.
Tuition Keeps Rising
According to the U.S. Department of Education, undergrads can expect to pay “$13,600 at public institutions, $36,300 at private not-for-profit institutions, and $23,500 at private for-profit institutions” per year.
The same study found that “between 2000 and 2011, prices for undergraduate tuition, room and board at public institutions rose 42 percent, and prices at private not-for-profit institutions rose 31 percent, after adjustment for inflation.”
And you thought diapers and formula were expensive!
Junior’s Future Plans
If tuition increases continue at this level, today’s new parents could easily expect staggering tuition payments. In other words, start saving for college as soon as possible. By putting away as little as $100 a month into a savings account, you can save nearly $40,000 over the course of 18 years.
The good news is, there are savings resources to help you get there. Missouri Credit Union offers members Coverdell Education Savings Accounts (ESAs). It’s a savings tool that’s exempt from federal income tax for qualified higher education expenses. Some key points to keep in mind when considering an ESA:
• Maximum contribution of $2,000 per year per child under age 18.
• May be used by either full- or part-time students.
• Qualified withdrawals include: tuition, room and board, books, computer equipment and more.
Learn more about saving for college by making an appointment with an MCU personal financial officer.
You may not be sleeping much, but you’ll rest easier knowing that your little one’s college dreams are closer to becoming a reality.