If you have kids, no matter what age they may be, you have probably thought about how to pay for college tuition. It probably comes as no big surprise that college tuition costs are rising at an outrageous pace. A recent article from Bloomberg BusinessWeek shows that the cost of college has increased by 1,120 percent since 1978. This is greater than the increase in cost for medical care, shelter, consumer price index and food. Earlier this week, Texas governor Rick Perry called for a freeze on tuition for all state universities. He feels that no student should pay more for their education their senior year than they did their freshman year.
Because of this huge increase in college tuition costs, it is more important now than ever to get a head start on children’s college tuition. Next month, my wife and I will be introduced to our first child and college planning will start shortly thereafter. Just thinking about how much this will cost us for one, much less if we are lucky enough to have more, is downright scary. Luckily, there are different options to choose from when deciding how to pay for college tuition. The most popular way is with a 529b plan in which you can withdraw the money tax-free for college expenses.
An Introduction to GradSave
Recently, I was introduced to GradSave which will help you save for your child’s college tuition and also get help from friends and family. While some of us might have filled out a wedding registry or a baby registry to get all of the items that we need, you can also do the same for your child. Instead of Grandma buying your child that ugly holiday sweater, you can tell her about GradSave and she can help contribute to her grandchild’s education.
How GradSave Works
The first thing you will need to do is create a profile for your child. You can add all of their basic information and even add a photo.
2. Share Your Child’s Profile
After the profile is all set up, you can start spreading the word to all of your friends and family. The gift of a college education is so much better than a gift that will sit in the back of your closet until it’s time for the next family garage sale.
3. Watch the Contributions Roll In & Track Your Progress
Once you start receiving gifts you have the choice of leaving them in your GradSave account or linking up to a 529b account. While your money is in your GradSave account it is safely stored in an FDIC bank account with Bank of America. You will have the ability to see the account grow and be able to track who is gifting you what amount.
4. Pay for College
Once your child is ready to head off to college, you are ready to pay the cost of college from the money everyone has given as gifts.
The Bottom Line
Because of the big increase in the price of tuition, every little bit helps. GradSave is a safe, fun way for you and your child to track the progress to meet the overall goal of paying for college in full. Right now you can also receive $5 off a $25 GradSave college savings gift card.
Interesting idea. You’re right, that with how crazy high college tuition is going up every little bit helps.
Certainly an interesting concept. I wonder how they profit from it; also, can you invest the money in mutual funds like you can in a normal 529 account. Lastly, what would be the benefit of something like GradSave over opening up a 529 account with your state?
Hey jason. With GradSave you can end up transferring the money to a 529b account that you have linked up. What GradSave helps you do is receive money from relatives to put towards the college fund. I think it’s a great idea for holiday/birthday gifts. You can simply email the link to your child’s account and a donation can be made.
I have never heard of this! I am going to check it out.
My kids both have a 529 and we contribute monthly. Paying for theircollege is a priority for us.