Saving for College in 8 Simple Ways

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4 Responses

  1. Julie Gliem says:

    One of the most expensive parts of paying for a college education is paying for roommate.  As a tax professional for 18 years, I have discovered a trick to help pay for this portion of college.  If you have the funds, purchase a rental house, condominium or even a modular home.  Rent this home to your child and well as a couple of your child’s friends.  By doing so, you can then claim this as rental income and you will be able to deduct the interest, taxes and insurance on the rental.  You will also be able to deduct the majority of expenses you are paying on the rental.  You will also be able to deduct the depreciation on the rental.  The money you are receiving from your child’s friends as rent will help cover your own child’s room and board.  Generally, a rental that has a mortgage looks like you are taking a loss on paper because of the depreciation so you will be saving tax dollars.  When your child is finished with college, you can then turn around and sell the rental and recoup a portion of your principal.

  2. Laurie says:

    Excellent comment, Julie. In fact, I would say that saving money to buy that rental property is a much better use of your money than saving it for a child’s college. Indeed, socking the funds away for your own retirement is a better use of your money than saving it for a child’s college. If a child is forced to borrow money for his college, then he has “skin in the game.” Many parents don’t want to see their kids saddled w/ college debt when they graduate, but keep in mind that the kid has YEARS of earning ahead while the parent is probably nearing retirement. Unless you have a dump truck load of money socked away for retirement, let the kid borrow money or look for scholarships. It’ll do him good.

    I have a friend who had his son take out school loans for his college…and the dad is reimbursing the kid just like a company would; for every grade A and B, the kid gets 100% tuition reimbursement, for a C he gets 50% and for anything else he gets $0. Talk about incentive!

  3. Lee Knott says:

    Cut down on the amount of college credits paid for. See what the child’s school accepts as correspondence or test credit. Often it’s at least a year’s worth of credits. CLEP routinely gives you 3 hours of credit for about $100 in test fees. I took a CLEP French exam for which my college awarded 14 hours. It was a private college that is now charging is $1100 per credit hour. That does not include fees and books. A $100 test and two hours of my life netted me $15,400 worth of credit. I ultimately took 64 hours of CLEP credit which shaved hours off my degree. It was mainly general ed so I had an easier time registering for classes as well. A student can begin testing for college credits in high school, using AP and CLEP. Some colleges also award IB credit too.

  4. Denise May Chen says:

    We have had an education fund for all 3 of our kids since they were babies and have put cash into it every year.  They are going on 17 now and we always knew it would be hard sending triplets to university, so we have been saving for that since they were born.

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