Guide to Calculating and Preparing for College Costs

By Heather Taylor0 Comments

CESA.jpgColleges across the country are just beginning their spring semesters. Whether you’re sending your child back to school or wondering what a college education will cost when your infant is 18, you know it will be a significant expense. Whatever the cost, do you know how to prepare for the expense?

A myriad of resources are available to help you calculate and prepare for the cost of earning a college diploma. Here are a few that might be helpful:

College cost guide. If you know where your child will study, or you would like to compare a few options, you can review those schools on CNN Money’s Guide. Not only can you see how much tuition costs at institutions across the U.S., you can also see the total bill when you factor in room and board and other expenses.

Paying for college: Questions answered. The College Board, an organization that promotes students’ college readiness, created a guide that will answer some of the other questions you have about the costs involved in higher education. Discover options for financial aid as well as the percentage of the total tuition price you will likely owe.

How do I pay for this?
Once you’re faced with the reality of just how much you will be contributing to a loved one’s education, you will likely be seeking ways to come up with the funds. There are savings options available, and the earlier you start, the better. Did you know you can self-direct college savings funds the same way you self-direct an IRA? You can invest money in a Coverdell Education Savings Account (CESA) and any returns grow tax-free in the account.

Investment goal calculator. When you have an idea of your savings goal, this calculator will help you figure out how to get there. Plug in your target savings amount and the length of time you have to save and you can get a picture of how much (and how often) you’ll need to contribute, dependent on the amount of interest earned.

Get more details on how a CESA can help you ease the burden of higher education costs.