Education 101: Ways to Save For College

Every year, pride and joy fills the hearst of millions of parents as their offspring receive their colleges acceptance letters.

…re locking in the cost of a specified number of semesters or academic courses in the future at current rates. These accounts offer somewhat less flexibility: you will maximize your investment if your child goes to an in-state public school, but should he or she choose to go out of state or to Harvard you will get less value for those prepaid tuition credits.
Coverdell Education Savings Accounts or ESAs
A Coverdell ESA, previously known as the Education IRA, is a trust or custodial account set up to pay for the education expenses of a child. With an ESA any individual can contribute up to $2,000 a year. Just like with an IRA, you have more say in where the money is invested, whether its stocks, bonds or mutual funds. The money grows tax-free, as long as it is used for education.
One benefit of Coverdell ESAs is that you can use those savings to cover the cost of attending elementary and secondary schools, whether…

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Education 101: Ways to Save For College

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