Saving for College

College Cost Forecast
For the 2008-2009 academic year the average cost of attendance for a four year public college was $18,326, while the average cost of attendance for a four year private college was $37,390. It's safe to predict that these numbers will go up. (Source: The College Board's 2008 Trends in College Pricing Report).

"Total average cost" includes tuition and fees, room and board, books and supplies, transportation, and other miscellaneous costs.

Why you should start saving early
Next to buying a home, a college education is the largest expenditure most parents will ever make! The more money you save now, the less money your child will need to borrow later. By investing even a small amount of money on a regular basis, you have the potential to accumulate a significant amount in your child's college fund.

The following table illustrates how your monthly investment can grow over time (assuming an approximate 8 percent after-tax return rate):

*Important Note: The above example is for illustrative purposes only and does not represent the return of any investment. There is no guarantee that your investment will realize a return and there is a risk that you will lose your investment entirely.

The Best Ways to Save for College-which works for you?
When saving for your child's college education, one size does not fit all. Should you choose a Coverdell education savings account or an UGMA/UTMA custodial account in your child's name? Or would you rather put your money in an account in your own name? Ideally, you'll want to choose a savings vehicle that offers you the best mix of tax advantages, financial aid benefits, and flexibility while meeting your overall needs.

• UGMA / UTMA Custodial Accounts
  This account can be used to save for college or anything else that benefits your child. A custodian (usually a parent) manages the account and its assets are considered an irrevocable gift to the child. For some parents, an UGMA/UTMA may be the best solution to saving for a child's future.
  Key benefits:
  • Provide a way for you to make a financial gift to a child, whether they are your own, a relative's or a friend's.
  • You (custodian) control how the account is managed on behalf of the child until the child reaches age of majority.
  • Enjoy high yearly gift limits.
  • People of all income levels are eligible to open an UGMA/UTMA account.
  • Enjoy an opportunity for tax savings.
  • Best of all: withdrawals can be used to pay for anything that benefits the child.

  Find out more | Download Azzad Funds Custodial Form | Download Ethical Wrap Custodial Form

• Coverdell Education Savings Account
  A Coverdell education savings account (formerly Education IRA) is a tax advantaged educational savings account that you can establish for any child under age 18. Withdrawals can be used to pay for qualified college, secondary or even elementary school expenses. For parents who are eligible to contribute to a Coverdell, this account may be the way to go.
  Key benefits:
  • Withdrawals for qualified expenses are generally tax-free.
  • Your account enjoys tax-free growth until withdrawn.
  • Enjoy flexibility of education expenditures.
  • Ability to change the designated beneficiary to another qualified family member.
  • You can continue to manage the account even after your child reaches majority age.

  Find out more | Download Azzad Funds Coverdell Form