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Thanks for taking the time to learn more about saving for college. We’re glad you’re here. At Florida Prepaid, we’ve been helping families save for college for over 25 years. More than 1,000,000 families have trusted us with their college savings. We’re ready to help you get started also with smart ways to save for college.

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Ways to Save

You could save for college in a traditional checking, savings or investment account. But, you would be missing out on a special tax advantage that comes with something called “529 plans.” This name comes from Section 529 of the federal tax code, which authorizes the plans.

There are two types of 529 plans – Prepaid and Savings. Both allow you to set aside funds for college. The big advantage of the plans is that the earnings on the funds in either plan are tax-free when spent on qualified college costs like tuition and fees. Here’s the basic difference between how the two work:

Prepaid Plan

Allows you to prepay the future cost of college at today’s
plan prices. When it comes time for college, we pay the
actual price of costs covered by the plan.

Savings Plan

Allows you to save for college using our investment options.
When it comes time for college, you use your savings to pay
for actual college costs.

How Much to Save

Common questions from those saving for college are, “How much do I need to save?” or, “How do I know that I am saving enough?” The answer depends on several factors, including how much college costs in the future and what you can afford to save.

With our Prepaid Plan, there is a set price for the future costs covered by the plan. So you just have to decide which plan you would like to purchase and get started.

If you choose to use our Savings Plan, we have tools to help you estimate future college costs and determine how much you’ll need to save to cover those costs. Though costs vary based on the school and location, the chart below provides some perspective on current national averages for one year of attendance.

Something to keep in mind when deciding how much to save is to focus on what you can afford. You may want to, but you don’t have to save for everything.

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    College Planning Tip

    Typical college costs include tuition and fees, room and board, books and supplies. If you can’t save for everything, that’s okay. In fact, a recent survey by Sallie Mae found that parents expect to pay about 40% of their children’s college costs. One popular approach to saving is to focus on saving for just one category like tuition and fees.

National Average Cost of Attendance

When to Save

You can’t predict the future, but you can take action today to be better prepared for it. The earlier you can start saving for college, the better. And, with the rise in college costs and student loan debt, saving for college is more important than ever.

With a Prepaid Plan, starting early means you have more time to spread out the cost of your purchase, resulting in lower monthly payments. With a Savings Plan, the earlier you save, the more time your money has to grow, and that growth can really add up over time.

If your child is older, in high school for example, please know it’s never too late to start saving for college. Saving money now means your child may not have to borrow later. And that’s something they are sure to appreciate.

Bottom line, there’s no better time than the present to get started saving for college. Let us help you choose a plan.

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