Strategies for Managing Student Loan Debt
Five strategies for managing your student debt.
Overview
Starting early makes a big difference
Saving for college is one of the most meaningful financial goals many families pursue. With education costs continuing to rise, starting early can make a significant difference — giving your savings more time to grow and reducing the need for student loans in the future.
Different Strategies
There are several tax-advantaged ways to save for education, each with its own benefits and considerations. Understanding how these tools work — and how they fit into your broader financial plan — can help you make confident, informed decisions for your child’s future.
The cost of higher education is more than just tuition
College planning isn’t just about tuition. It can also include room and board, books, technology, and other related expenses. By building a strategy now, you can create flexibility and options when the time comes.
Education Savings, how to decide?
Clearly define goals for education savings and we can help guide you to the best strategy.
529 College Savings Plans
A 529 plan allows your contributions to grow tax-deferred, and qualified withdrawals for education expenses are generally tax-free. These plans offer flexibility, high contribution limits, and the ability to change beneficiaries if needed.
Coverdell Education Savings Accounts (ESAs)
Coverdell ESAs also provide tax-free growth for qualified education expenses and can be used for certain K–12 costs in addition to college. However, they have lower annual contribution limits and income restrictions.Learn how inflation can affect the power of your Social Security benefits and strategies to mitigate this risk.
Custodial Accounts (UGMA/UTMA)
Custodial accounts allow you to save and invest on behalf of your child. While they offer flexibility in how funds are used, the assets legally belong to the child and may impact future financial aid eligibility.Explore different scenarios and goals based on when you begin to take benefits.
Taxable Investment Accounts
A standard brokerage account offers full flexibility with no restrictions on how funds are used. While earnings may be subject to taxes, this option can complement other education savings strategies.
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