The ABCs of covering college costs
This used to be the path to college: Study hard, get good grades, ace the SAT. With tuitions soaring, there’s a new formula: Invest early, get good returns, pray for a great financial aid package. Who ever dreamed covering costs would be harder than passing physics? Fortunately, our CFS* Financial Representatives are good tutors. They educate parents about all the different types of college savings plans. If they help you make a good choice, maybe you’ll give us an A for effort.
Here are the Education Savings Accounts you’ll learn about from CFS Financial Representatives.
- 529 Plans. These investment accounts grow tax-free, and proceeds are withdrawn tax-free, as long as the money is used for qualified financial expenses.
- Coverdell Education Savings Accounts. Similar to 529s in tax benefits, Coverdell accounts can also be used to pay for private elementary and high school tuition. However, there is a $2,000 limit on annual contributions.
- UGMA and UTMA Custodial Education Savings Accounts for Minors. These accounts allow parents to protect the assets of minor children. These accounts are taxed. However, there are no contribution limits.
- Parental inquiries. Representatives can answer questions frequently asked by parents. They include: Can I access the money in an education savings account in the event of an emergency? And, how does an education account affect a student’s financial aid award?
- More generations. Grandparents often want to contribute to 529 Plans. CFS* Representatives can explain if the money in the account might affect their Medicaid eligibility.
Workers Credit Union provides banking services to greater Chelmsford, Westford, Acton, Groton, Townsend, Lunenburg, Lancaster, Leominster, Fitchburg, Orange, Lowell, Worcester, and Athol, MA. Contact us to discuss your education savings account options for college planning.