This month, the education community celebrates Financial Aid Awareness Month often by sharing information with students and families about access to federal, state, and institutional student aid. College and higher education costs can sometimes be steep costs to families. However, a college degree can be important in providing opportunities in young people’s careers, so it sometimes falls on the whole family to pay for the important cost of education.
Financial aid is a crucial piece of the college planning puzzle. For those who seek a college degree but face difficulties in paying for it, financial aid is their ticket to career success. It opens their options for what level and type of education they can receive, and in some cases, is a necessity for economic mobility.
Regardless, higher education will likely cost you something whether you receive financial aid or not. The good news is that there are savings plans available for you, just like your retirement or health savings accounts, that can help you save for a kid’s or grandkid’s college.
The 529 savings plan is a specific type of savings and investment account that is tax-advantaged for qualified education spending. It covers items such as tuition payments as well as other expenses associated with academic activities, such as the purchase of school supplies. But just like an IRA or 401(k), starting the saving process earlier is often advantageous.
The financial aid filing process happens when applying for college, but the college savings process happens much sooner. That’s why it’s crucial for families to include college and education planning in their financial plan, in addition to seeking advice and guidance on the financial aid administrative process from qualified education sources and professionals.
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