College Planning & Savings

Plan ahead for your children's future through the College Savings Plan.

A college savings plan provides a flexible, tax efficient way to save for higher education. You can use the money to pay for qualified education costs at any eligible college, university, technical or graduate school in the U.S. as well as some foreign institutions.

Facts at a glace 

Earnings and withdrawals for qualified higher education expenses are free from federal tax. Only the account owner may request withdrawals. Any earnings on non-qualified withdrawals are subject to a 10% federal tax penalty in addition to federal and, if applicable, state income tax.

There are no income limits. You can contribute no matter how much you earn.

You can contribute until your account value reaches $500,000.

Up to $15,000 ($30,000 for married couples) can be contributed each year without gift-tax consequences, and under a special election, up to $75,000 ($150,000 for married couples) can be contributed at one time by accelerating five years’ worth of investments

You maintain control of the assets. You decide when the money will be spent.

Growing Price of College

Many want to help their children, grandchildren, nieces and nephews realize their dreams — whether it’s to become an astronaut, engineer, teacher or technician.

And everyone knows how expensive a college education can be.

College costs roughly $120,000 for four years at a private school and $55,000 for a public school.

College costs are increasing almost twice as fast as the inflation rate.

The odds of winning a full-ride athletic scholarship are less than 1%.

What four years of college could cost? *

Your child’s current age Public school Private school
Newborn $204,244 $415,818
3 $171,487 $349,128
6 $143,984 $293,135
9 $120,892 $246,122
12 $101,503 $206,649
15 $85,224 $173,506
18 $71,556 $145,679

But there’s good news

Changes in the tax law have increased the opportunities for tax-advantaged savings, no matter how much you earn.

You now have more flexibility to manage your college investments.

You have the option to change your beneficiary if you need to.

*Source: American Funds Literature "Paying for college is harder than ever". The College Board for the 2006–2007 school year; projected costs are adjusted for 6% inflation.  Assumes college costs increase at 6% a year on average. For illustration only.

                        

2021 Oldham Resource Group. All rights reserved.