529 College Savings Plans are arguably the best way to fund your children’s higher education, and has long sense surpassed the traditional methods like, Custodial Accounts and Educational IRA’s.

A 529 Plan is an educational savings plan is a plan set up under the IRS code 529, to help families fund their children’s education, and have significant tax breaks. I does not matter what state you live in or what state your child goes to school in; you can still fund his or her 529 plan.

Here are 5 benefits of 529 plans that you’ll want to know about.

Federal Tax Breaks: While your deposits in the plan are not deductable on your tax return it grows tax deferred. When your child is ready to attend college, distributions that are used for those expenses are tax free. It’s not hard to imagine the bite the IRS would take out of an investment that grew from twenty grand to two hundred grand, and that is what used to happen to the old college savings accounts, like custodial accounts. Keep in mind, if you use the money for non college expenses you will be subject to federal and state taxes.

State Tax Benefits: Nearly every state offers the same benefits as the Feds do, but just check in your particular state to make sure. If your state does not offer any benefits at the state level, just switch to a state that does, and you do not have to move to receive those benefits.

You Control the Funds: Unlike the old custodial accounts and Educational IRA accounts, the 529 account does not automatically become the property of the beneficiary. In other words, if your child decides not to go to school he cannot just take the money and run when he turns eighteen. You can hold on to the funds or fund the education of a younger sibling or a relative. Of course if your child does so well he/she gets a free ride in the school they are going to, then you can use the funds to help another child.

Large Deposits are allowed: With the old accounts, there were always the strict limits the IRS put on such accounts when it came to deposits. In many states you are able to contribute $300,000 or more, a far cry from the $500 limit of the old Educational IRA’s.

Flexibility: You have the ability to change 529 plans if you decide the plan of a different state is more beneficial than your current plan. You can do this once every twelve months for the life of the account.

So there you have it, five of the top benefits to the 529 plans. Do your research, determine which plan is most beneficial to you and get started funding your children’s college education.

Related Links: How to save money for college | How to save money on education costs

With college fees at an all time high, many students find themselves struggling to pay bills and meet deadlines. Some students take a semester off so that they can work and earn enough money to pay their bills. Many students even find themselves at risk of being cut off from college. The question is how one can save for college? What resources can we make use of?

Tuition, room and board for a 4-year degree course would cost anywhere from $40,000 to $150,000 per student depends on the course. Parents need to save for their children’s college expenses from very early on. Section 529 investment plan is a good choice to start with. Parents can also use Education Savings Accounts to save for college expenses. Contributions to Education Savings Account are not deductible, but amounts deposited in the account grow tax free until distributed.  The beneficiary will not owe tax on the distributions if they are less than a beneficiary’s qualified education expenses at an eligible institution.

If your savings are not enough to cover the college expenses, there are a number of scholarships and grants meant to help eligible students meet their college expenses. So, how do you find the right scholarship for yourself? The best resource is the internet of course. It would be a good idea to check out government sponsored scholarships first. The government allots billions of dollars in scholarship aids each year so, trying for a government scholarship will be worth it. Web sites like students.gov, edu.gov and fafsa.gov will provide you with information on government sponsored college grants and scholarships. You can get an idea of the criteria for student aid and the expenses covered. Students.gov even has a detailed college planning course. FAFSA is the Federal Application for student aid. You can apply for FAFSA midterm. Many students who were previously supported by income from their family find themselves stranded when family members suffer the brunt of the recession and lay-offs. Federal aid is of great advantage for such students whose families cannot contribute as much as they used to.

Collegeboard.com, fastweb.com and scholarships.com are other websites with dedicated resources for those pursuing scholarships. Many of the scholarships on offer have rolling deadlines. You can easily apply for these scholarships online. A point to be noted while searching for scholarships on the internet is that many sites request personal information from you such as age, address, e-mail, phone number and so on. It would be wise to go through the privacy policy of these web sites so that you know who has access to your details. In this way, you can prevent your mailbox from being flooded with spam and junk mail.

Sometimes scholarships and grants are simply not enough to cover tuition costs and other expenses. In that case, students can go in for education loans. There are three categories of education loans:

• Student Loans
• Parent Loans
• Private Student Loans

As in the case of scholarships, government loans are the best option as far as student loans are concerned. These loans can be obtained at a minimal interest rate making it easier for parents and students to pay them back. Moreover, government loans also have a grace period which permits students to get a job before starting repayment. With government loans, you also have the option of “loan forgiveness” wherein your loans are written of in exchange for volunteer work, military service or public service.

Many private banks also offer attractive rates on their loans. This is a fine option for those with good credit. However, you may not be able to enjoy the privilege of grace period.

If you are looking for a good student loan, search the internet for a list of trusted lenders from both the private and government sector. Sites like simpletuition.com and studentloanmonkey.com are valuable resources for those hunting for student loans. You can compare the loans cited in different sites and settle for one that is best for you. Many websites have calculators that you can use to calculate monthly loan payments and so on.

Colleges also go to great lengths to keep students enrolled and prevent them from dropping out due to financial issues. Many schools provide emergency loans and grants to students. If your college has such a provision, be sure to check it out.

If you plan to apply for student loan, do your homework well in advance. Start researching early so that you know what options you have. Banks and educational institutions require a number of supporting documents and letters of recommendation from faculty before they can sanction your loan. You can discuss the requirements and other details with education counselors in your college or university. They should be able to help you choose a good student loan plan. They can also guide you on how to apply for scholarships and whom to approach.

The resources to help meet your college expenses are all out there. You just need to know where to start. With the right approach, you will be able to secure a grant or loan to help you pay those mounting bills.

Related Link: Saving For College