The Secret to Making College More Affordable

Transcript:

The Secret to making College More Affordable

[video: Text appears that reads "Kiplinger Presents: Ways to Make College More Affordable" followed by text reading: "Sponsored by Mutual of Omaha". A business man appears speaking to the camera. In the lower left corner it reads "a special report From Kiplinger's Personal Finance. As the man speaks, the following text appears "$20,000 for in-state students" and "private schools can top $45,000".]

If you have children, you want to be able to send them to college. It’s every parent’s dream. Yet the average annual cost of a public, four‐year college today is about $20,000 for in‐state students. Private schools can top $45,000. And the tab keeps rising.

[video: An illustration of a college diploma appears.]

Saving enough to pay the bills for one child is daunting. Paying for two or more … is downright frightening. But the college education you want to provide for your children can be within reach. How?

[video: Text appears that reads "you can build savings with 529 plans & coverdale accounts" followed by text that reads "tax-advantaged savings can be a powerful way to fatten your college fund over time".]

Start saving early. While they’re still in diapers even. That’s because you can build savings in tax‐favored plans, such as 529 plans or Coverdell accounts. And tax‐advantaged savings can be a powerful way to fatten your college fund over time.

[video: Text appears that reads "$200 per month" followed by a line graph with two ascending lines. One climbs to the text "$87K saved" while the other climbs to "$40K invested". The x-axis reads "17 years".]

Here’s how it works: Let’s say you sock away just $200 a month as your child grows. After 17 years, assuming your investments earn an average of 8% annually, you would have invested about $40,000, but you will have almost $87,000 in your child’s education kitty.

[video: Three human silhouettes appear of bodies throwing graduation caps in to the air.]

Throw in the occasional windfall, gifts from grandparents, and maybe even some of your student’s summer earnings and voila! Paying at least some of those college bills just became a realistic goal. Remember: When it comes to saving for college, you have nothing to lose by getting started early and everything to gain.

[video: Text appears that reads "Kiplinger" followed by "Sponsored by Mutual of Omaha".]