Education Planning
The biggest challenge for students and parents when planning for education are the financial costs; including tuition and academic expenses. We’re here to help you understand your options, determine your most effective avenue, and put a plan in place to help you reach your education funding goals.
Assess college savings plan options
- 529 college savings plans. 529 plans are generally sponsored by states, state agencies or educational institutions for qualified college tuition and expenses. These investment plans stay under your control and offer certain tax and contribution advantages. A 529 owned by a grandparent isn't included in the financial aid calculation but withdrawals are considered financial aid income for the student.
- Custodial accounts (UTMA). This option allows you to make an irrevocable gift to a minor to an account that your child ultimately controls when he or she turns 18 or 21 (depending on state law). He or she can use the funds for tuition and other expenses, but the dollars do not have to be used for education.
- Coverdell Education Savings Account (CESA). You can contribute to this investment account only until children turn 18 unless the child is a special needs beneficiary. This type of account can be used for elementary, secondary and college expenses and tuition. It includes tax benefits but has a maximum contribution limit of $2,000 per year.
- Traditional/Roth IRAs. Penalty-free distributions are allowed from IRAs for eligible educational expenses for you, your children and your grandchildren. IRAs are not counted as assets for financial aid calculations, but withdrawals are considered financial aid income for parents (income taxes may apply to IRA and Roth IRA withdrawals).