Categories: Student Loans

Preparing for Your Child’s Future: Manage Future Student Loans, Consolidation, and More

The one thing parents want for their children is for them to have a wonderful future. Oftentimes, that focus is fairly close to the child’s immediate needs. But there’s one tremendous determining factor in your child’s success: education. Your child’s education is more than just grade school and high school. It also includes college. If you’re financially able and want to give your child an even greater leg up on her future, there are a number of plans you may want to consider.


Costs for tuition have continued to soar even as the job markets appear to be stagnant. However, having a college education remains important for succeeding even in the worst of times. The Bureau of Labor Statistics report that individuals without a college degree are twice as likely to remain unemployed for long periods of time. Additionally, those who have a college degree still make on average $17000 more than peers without a college degree at similar career points. The problem for many families is that paying for college all at once can be tricky. While debt consolidation plans can help on down the road, you may be able to skip that entirely by opting for a prepayment plan.

Prepayment plans allow you to invest money into a particular program. There are a number of options out there, each with their own strengths and weaknesses. The most popular include

  • Special Education Accounts
  • 529 College Savings Plans
  • 529 College Prepaid Tuition
  • Coverdell Accounts

Some like the Coverdell account have a limit whereas others like the 529 Savings Plan allow you to save upwards of $305,000. All of these accounts can provide certain tax benefits for your child when she uses them as they are tax free so long as used for qualified expenses. Qualified expenses generally include

  • Tuition
  • Room and board
  • Supplies
  • School fees

A Word of Advice on

One thing to bear in mind though is that preparing for your child’s future shouldn’t come at the cost of your present. You still have to raise your child and give her the best life possible now. That doesn’t mean that you should take out loans or mortgages right now to pay for it. Instead, pay what you can. It’s fine to go without eating out or expensive new gadgets, but you shouldn’t put your home or your financial future at risk. Daily Finance recommends setting aside a specific amount from each pay check to go into the fund, wherever that might be. Even if you don’t wind up paying for all of your child’s college tuition, you have helped some.

Your child’s future will be strongly influenced by her education, and one of the ways you can help protect her is by starting savings now. A number of programs exist from the 529 to Coverdell. You don’t have to save the entire cost of her college tuition, so don’t take out loans or mortgages. Instead, save what you can and make wise financial decisions to provide your child with the best future.

If you are finding it hard to put away for your child’s college education because of your student loans, now is the time to talk to an attorney at Van Horn Law Group about options for consolidating, reducing or possible eliminating your student loan payment.

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Published by
Chad Van Horn

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