College Prep Guide: Planning and Saving for a Child's Higher Education

by Mark H. Gaudet

As the cost of higher education continues to increase at a rate that is roughly two to three times inflation, parents are often left wondering how they will be able to save enough to send their children through college.

Fortunately, there are steps that can help you and your children negotiate the expense path toward higher education. First, I’ll highlight the federal tax credits related to post-secondary education that are available to parents and/or their children. These credits offer tax savings for individuals currently assisting in the funding of their children’s college education.

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Second, I’ll focus on some of the common tools that are being used by parents and even grandparents to prepare for upcoming college expenses. These include the use of custodial accounts, Section 2503(c) trusts, Coverdell education savings accounts and qualified tuition plans, also known as 529 plans.

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