Invest in Your Child's College Future

Invest wisely in your child's college future

It is that time of year again and many college kids are going back to school. With the state of the economy it is harder and harder for college-aged kids to get student loans. Due to this situation, college kids are asking their parents to co-sign for a loan. Do not fall into this trap! If you are a parent and co-sign for your child’s loan he or she will end up paying around 12% interest on this type of loan.

A better option is to take out a PLUS loan. You, as a parent, will take out the PLUS loan in your name or names. The PLUS loan is only averaging around 8.5% interest rate. This is a HUGE savings for your child. With the cost of books, food, school supplies, clothes, etc., you will be helping out your child immensely. The two or three of you can come up with some type of plan where your child pays you back weekly or monthly if you so choose.

If your child or children are not in college yet but will be within the next five years, make sure that you are invested in a fixed-interest option or options instead of stocks. The market is just too risky at this time.

If you have a 529 college savings plan, go over your plan with the person you hired to invest for you. Go over this plan very carefully so you do not lose any more money. The 529 college savings plan has lost a lot of money in the past few years as well as other college savings plans. You can help to prevent anymore loss by going over this with the person you hired.

For more information on how to invest in your child’s college future, please visit: http://www.preparednessmentor.com/.