First Person: Alternative Ways to Fund Our Child’s College Education

Yahoo Contributor Network

When considering ways to fund a child's college education, we're often left thinking of the regular funding methods such as a 529 or similar structured college savings plan that may be administered through a financial institution. However, these typical options for college funding don't have to be the only ways to help a child financially as they prepare for or head off to college. And for many people who suffered through the financial collapse of 2007 and 2008, the thought of putting more of their hard-earned money into a stock fund style of savings plan might not be the most pleasant of ideas.

Here are a few alternative ways of funding a child's college education that we're considering for our kids' futures.

Cost Splitting

The college cost split can be a great way to help fund a child's education without overextending any one party. This was the route my parents took with me. For example, a single parent might be able to split the costs with a child evenly. A married couple (or divorced as in my situation) could split the costs into thirds, both parents and the child sharing equally in the costs.

Whatever the situation, being able to split college costs among multiple parties can help alleviate some of the financial strain upon the college attendee.

Government Savings Bonds

I've collected savings bonds since I was a teen, and I've held onto them as an investment. Over the years, I began to look at them as a possible source of funding for our kids' education.

Government savings bonds can be a great way to save for a child's education and one that often doesn't get the hype that 529 plans or similar college savings plans do. However, government savings bonds can be a safe way to save for college, are quite secure, could hedge bets against inflation by going with the series I -- inflation based -- bonds, and their interest earned over time could even be exempt from federal taxes if used for certain educational purposes.

To find out more about such bonds, consider taking a stop in at the government's website at

In-state Tuition

These days, with tuition costs seemingly continuously on the rise, if our child isn't getting his or her education through an online institution, it might be worth taking a closer look at in-state tuition. Whether this means our child attends a school in the state in which we live or we move into the state in which our child is considering college, getting an in-state tuition rate could cut thousands or even tens of thousands of the cost of an education.

I've found that checking out the financial pages of the institutions in which we are interested in advance to making a final decision can help us find out just how much in-state versus out-of-state tuition rates are.

Payment Swaps

An education can certainly take a bit in the way of self-sacrifice. Sacrifice not just in time and effort to obtain that education but in a little denial of self-gratification along the way, and this often applies to parents as well as the students working to get that education.

Whether it's through a few vehicle repairs rather than buying that new car, another year or two of renting rather than putting money toward the downpayment for a home, putting off the new windows or vinyl siding for the home, or cutting off a few of those extra holiday gifts in deference to putting more money toward a college education, doing some payment swaps on things we'd like rather than need could instead allow us to put more money toward our child's education.

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The author is not a licensed educational professional, financial professional or academic advisor. This article is for informational purposes only and does not constitute legal, financial or educational advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.


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