In addition to financial aid and scholarships, there are other ways to manage and reduce college costs. The Indiana Family College Savings Plan helps pay for college. Families can establish accounts as soon as a student has a social security number. The savings plan defers federal and Indiana income taxes on the interest in the account until you are enrolled in an approved postsecondary educational institution. When funds are used, they are taxed at a student rate, which is usually lower than a parent s.
Families pay no taxes on the earnings, as long as the money is used for education expenses.
For information, talk with a trusted financial adviser. For information, talk with your bank s investment officer. Pre-paid tuition plans allow parents to invest early for expected college costs. Some states allow non-state residents to invest in the program. Additionally, pre-paid tuition plans can now be used for room and board as well as for tuition.