College Tuition: Start Saving Early
College Tuition: Start Saving Early

The sooner you start saving for your child’s college tuition, the better off you’ll be — but make sure your retirement fund is taken care of first. Currently, tuition and fees at four-year public institutions have increased by over 50% in the last decade. Fortunately, there are financial opportunities out there such as the 529 plan, scholarships, and student loans. At DEXSTA Federal Credit Union, we want to help you map out your financial future, so you and your family can live your best life.

529 College Savings Plan

You can start saving up for your child’s college tuition before they are born. You can transfer the beneficiary to another member of your family without penalty with the 529 college investment plan — some people will take out 529s and then transfer it into their child’s name later down the line. When you create a 529 college investment plan, your money grows federal tax-free, and anyone can contribute to it, like parents, grandparents, aunts and uncles, even friends — and you are in control of the account. The guardian, not the beneficiary, decides when to take distributions.

If you go this route, start saving as early as possible because it adds up over time. Think about it, if you start setting aside $50 a month when your child is born, when they turn 18 they will have $21,000 (based on a 7% return). Remember that you need to balance an affordable college with your other priorities like buying a house or helping your parents. Saving for your child’s tuition is a great goal, but there are other financial options.


Your child should apply for scholarships to get the money they don’t have to pay back. The only way they will receive a scholarship is by applying for scholarships. Guide them by applying early, and often. If your child waits until last minute to apply, their application will be at the bottom of the pile. Encourage your child to apply to as many scholarships and grants as possible. This will help your child have a better chance at landing a great opportunity, which they don’t have to pay back.

Student Loans

Private student loans are separate from federal student loans. Private student loans are non-federal loans made by a lender such as a bank, credit union, state agency or school whereas the federal government funds federal student loans. Private student loans can work side-by-side with federal student loans to help you pay the Cost of Attendance (COA).

DEXSTA Federal Credit Union | Your Best Interest

At DEXSTA Federal Credit Union, we have some suggestions on how to get the money you need for your child’s future. Your child should strive for grants and scholarships, and get as much “free money” as possible. The next step is applying for Federal student loans because they are low-interest, fixed-rate loans made with government funding. The last piece of the puzzle is private student loans. Private student loans should not be your primary source of funding; it should be a piece of the pie. Stop by one of our branches or give us a call, we would be happy to walk you through financial options!

Credit Union Deals: