Prepaid College

If you want to guarantee your childs future education in college then you might want to take a look at prepaid college plans

. This plan lets you pay for tuition fees for your childs future higher education at current prices. A very viable solution to rising tuition fees yearly which will of course result to higher fees in the years to come.

But before deciding to acquire a prepaid college plan, you may want to look at the benefits and downsides of this sort of education plan.

The Common Advantages of Prepaid College Plans

1. It is a low risk investment. Prepaid college plans are handled by the state. So you wont have any worries that you might lose your investment because it is guaranteed by the government. You will be assured that the money you will invest will produce profits that will enhance its value to match up the tuition fees years from now. This kind of investment fairs better than other low risk investment opportunities like certificate of deposits.

2. You wont have to worry about your childs college tuition in the future. If your child will go to college, you wont have to worry about the costs of tuition anymore because you already paid for it years ago at a low price. You will have peace of mind and you have assured your childs education by investing for a plan that is worthwhile.

The Disadvantages of Prepaid College Plans

1. Limitation of Colleges to Enroll. Well, the main disadvantage of prepaid college plan is that your child wont have a choice where he or she has to go to college. The plan only offers enrollment to colleges within the state where the plan was obtained. Also it limits its coverage to state universities only. It means your child cannot go to private colleges or universities. It implies very limited choices of school to go to for your children.

2. The Income produce from this investment is not profound like other investments. If you want to earn more from your money then you might want to look out for other alternatives like bonds and stocks.

3. Another loophole for this kind of plan is that it will render you ineligible for grants or other government finance aids. If youre son or daughter applies for college grants%3b there might be a chance that the state will not consider their application because you have paid for a prepaid college plan. For them, you can afford to pay for your childs education without any government help.

4. Another thing is that you need to be sure that youre going to purchase a prepaid college plan and be steadfast with your decision. Withdrawing from it might cause more financial damage which will make your decision so wrong in the first place.

So before considering investing your money in a prepaid college plan, you need to weight the advantages and disadvantages first before making your decision. Just remember that, your childs education is the best thing you can give for them in the future.

by: davaoprojects

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