The College Board estimates the cost of college per year for a student living on campus ranges from $25,890 - $52,000. That can be a pretty daunting number for parents to save for, or an even more daunting amount of debt for students to have to pay off after the fact. As of 2108, in the US, there were 45 million outstanding student loan borrowers with $1.56 trillion dollars of debt and a delinquency rate of 11.5%. On average, a 2018 graduate has approximately $29,800 in student loan debt. As a parent you might be asking yourself, how do I eliminate or at least limit the amount of debt my child takes on for college? Depending on your income, federal and state student aid may help in the form of grants that would not need to to be paid back, or more commonly through direct and indirect loan programs that provide lower interest rate loans to students. There are ways, however, to save specifically for education costs through 529 plans. Debbie Boisselle, VP Investments for Citizens National Bank, explains how they work.

"Every state has a 529 Plan and anyone can open one or contribute for any person making it the most flexible of the savings options," states Boisselle. The account owner controls it, so if the parent opens it, it remains their account even if they use the funds for their child. There's no limit to how many you may own and grandparents can own their own, which allows them to get the tax deduction. There are no income restrictions and you can contribute as little as $10/month to keep them active. Maximum contributions are currently $15,000/year and withdrawals are tax-free as long as it's for education-related expenses." In Ohio you can change the beneficiary of the account at any time and there is no age restriction. So if you have a child that ends up getting a scholarship and you want the money to go to your second child, you can do that," explains Boisselle.

College 529 savings accounts are a convenient way to save and the money sheltered from taxes. "The best way to start saving, is to just do it," states Boisselle. Too many people put off beginning a savings plan when they could have just started with a small amount and already had money saved. 529 accounts are easy to start and can be opened online through your state's website or by using a financial advisor. To learn more, view Debbie's entire presentation on our YouTube channel.


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