Filed under: Personal Finance, News, The Economy, Financial Aid
Banks and credit unions are developing new methods of helping families finance college educations. In this economy, families have seen certain accounts set aside for financing education, such as those funded by stock portfolios, steeply decline in value. On top of that, tuition costs at top schools have increased by 62% over the past ten years, cutting sharply into education savings. To help families cope with these trends, “a growing number of financial institutions are rolling out incentives to help families save or pay for higher education,” according to USA Today.
Two examples of these college saving offerings include:
Citizens Bank is giving a $1,000 bonus to consumers who open a college savings account by a child’s sixth birthday. Justice Federal Credit Union – which serves Department of Justice and Homeland Security employees – is offering a discount on a loan to pay for college costs. And Grow Financial Federal Credit Union in Tampa is donating money to student scholarships based on a local university football team’s “return yards,” which is how far players run with the ball after receiving a punt or kick. (USA Today)
A new college saving deal offered by your bank may be the right thing for your family. Yet, financial experts urge consumers to carefully evaluate any college saving incentive. The motive for lending institutions to create these deals is to build better relationships with a future generation of customers. The student of today will need loans for grown-up purchases like houses once a college education is fully financed. Thus a bank’s offering may not necessarily be in your best interest. You will still want to shop around for college savings plans that net you and your student the best deal.
What are some additional ways of saving for and paying for college during tough economic times? State 529 plans are one important tool in a parent’s arsenal for paying for college, and should be explored fully. Please see SmartMoney.com for more great college saving advice.