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3 Tips to Help Your Kids Avoid Student Loan Debt

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The college experience is an important passage into adulthood and helps young adults identify their career aspirations. If you have known the struggle of paying for college with student loans, you’re probably looking for ways to help your kids avoid racking up debt to pay for their higher education. Fortunately, there are a few simple options that can help.

 

Term deposits 
Earn higher dividends compared to a regular savings account. Don’t have a lot of extra cash to invest? Open a term deposit account without a large initial investment. Many financial institutions, including Mountain America Credit Union, offer these types of options. Look for these perks:

 

  • Only $5 to open the account.

  • Continue making deposits throughout the term.

  • Choose from a variety of terms—from 12 months to 5 years.

 

Does your child have money from birthdays, mowing lawns or babysitting? Teach them wise money habits now by encouraging them to deposit half of their earnings into a checking account and half into a term deposit.

 

Concurrent enrollment and advanced placement (AP) courses 
Save hundreds or thousands of dollars on tuition, books and fees. With concurrent enrollment, students earn high school and college/university credit simultaneously. This will put them on the fast track to earning a paycheck (and a place of their own).

 

AP courses are a similar option—high school students substitute college-level courses for regular classes. Once the course is complete, students pay to take an exam, earning college credit if they receive a high score.

 

529 education plans 
According to the Securities and Exchange Commission, the IRS has authorized two types of education plans: prepaid tuition and college savings.

 

Save money when tuition rates rise with prepaid tuition plans. Purchase credits now at current prices for participating in-state college and university tuition. This is a great option if your child knows where they plan to attend.

 

You can also set money aside in an investment account for qualified higher-education expenses with a college savings plan. These plans cover expenses, including tuition, mandatory fees and room and board. Select investment options based on your overall risk tolerance.

 

Get an early start on saving and planning for your child’s education to avoid student loan debt. Remember, you don’t have to do it alone. Financial advisors at Mountain America can help you identify a strategy and choose the right options for you. Give us a call today to make an appointment—we’d love to help you plan for your child’s future!

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