You may think it’s premature to start thinking about college tuition when your baby is still wearing a onesie, but it’s not. College costs in the US have been rising for years and show no sign of slowing down. And in terms of opportunity, a college education is still the most reliable path to higher wages and greater job security.1

So how do you pay for your child’s expensive but valuable education?

In 2018-19, in-state college tuitions were averaging $26,290 per year and private colleges, $35,830.2 Student loans can help cover those costs, but with careful planning and resourcefulness you can reduce the amount of money you’ll need to borrow, or even avoid having to take out student loans at all.

Here are five ways you can start planning for your child’s education right now.

Start saving with professional guidance

Time is your secret weapon when saving for college. If you set aside $100 a month beginning when your child is born, compounded at a relatively modest interest rate of 4% a year, it will add up to $24,000 in 18 years. Get advice from a financial professional early on:  A financial strategy will help you put away money in gradual, less noticeable increments, while still allowing you to plan for life’s other expenses.

Use a savings plan

Created by the government, 529 plan accounts were designed specifically to encourage college savings.3 Money has to be set aside in the plan from your already-taxed income, but the interest that money will collect isn’t taxable.4 And when you eventually withdraw the money, it won’t be counted as taxable income as long as it’s spent on education. A Coverdell account offers many of the same features as a 529 plan, but applies to elementary and secondary schools, too. There are stipulations, contribution limits, and age ranges on each type of savings plan, and even on the variety of investments you can pursue, so you should turn to a pro for help.

You might also want to consider whole life insurance. You already know life insurance is an important way to protect your children if you should pass away, but a whole life insurance policy offers the added benefit of building a tax-advantaged cash-value asset that you can later use to help pay for education costs.5,6

Ask for gifts

It may not have the photogenic appeal of watching a child cuddling a plush toy, but your child’s grandparents may be happy to contribute to their grandchild’s educational goals on gift-giving occasions. In fact, contributing just one Social Security payment a year into a 529 fund would add up to a helpful amount of money in 18 years' time. Grandparents may also gift money tax-free to pay for a whole life insurance policy for their grandchildren to ensure they’re financially protected when they are gone.

Hire a college advisor

Financial aid can be confusing, but virtually all post-secondary educational institutions offer it. It’s most important to know what types of aid need to be paid back and which don’t. Grants, awards and scholarship are essentially free money to help fund your child’s education, and a professional college advisor can help you navigate the options and apply for the help that’s available to you. Certified advisors charge for their help researching colleges, filling out admissions forms for financial aid, and interpreting the financial aspects of acceptance and award letters, but their guidance may prove invaluable.

Think outside the box

In-state public colleges often charge the most affordable tuition, but there may be significant grant and scholarship funding available at lesser-known private institutions, depending upon the size of the school’s endowment or even its religious mission. There is also a staggering variety of scholarship funds, even for those who aren’t athletically or academically exceptional. These scholarships sometimes require volunteer hours or other commitments from their recipients, but you may find one that is the right fit for your child’s financial needs and interests. There may also be awards for college-bound students within your specific community, religious group, or social group. Even if you don’t hire a professional college advisor, your own research time can pay off, expanding and suggesting educational directions that your student might not otherwise have pursued.

With enough research, you may also uncover some non-traditional methods of putting money away for college, like linked credit cards, which reimburse you at 2%, payable directly into your 529 account. Make sure you explore all possible avenues to uncover opportunities you may not know are out there.

Whatever methods you use to save for college, it’s important to monitor your financial strategies at least annually. Many government limits, including income ceilings and tax allowances, do change over time – often for the better. The most important thing is to save money for kids’ college and to plan with optimism for your family’s future. Remember that the more time you give the savings to work, the more options you’ll be making possible for your kids.



“Educations Pays: The Benefits of Higher Education for Individuals and Society,” The College Board 2016


“Trends in College Pricing,” The College Board 2018


Investors should consider the investment objectives, risks, charges and expenses of a 529 plan carefully before investing. This and other information are contained in the Program Description, which may be obtained from your investment professional. Please read it before you invest. A 529 plan is a tax-advantaged savings plan, issued and operated by a state or educational institution that helps families save for college. Investments in 529 plans are not insured by the FDIC or any other government agency and are not deposits or other obligations of any depository institution. Investments are not guaranteed and are subject to investment risks, including loss of the principal amount invested. Tax implications vary significantly from state to state. If you or the designated beneficiary is not a resident of the state offering a 529 plan, you may want to consider, before investing, whether your state or the designated beneficiary's home state offers its residents a plan with state tax advantages or other benefits. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.


Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.


Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.


Cash accumulations in whole life comes from dividends. Dividends are not guaranteed. They are declared annually by Guardian’s Board of Directors.

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