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The AP® Challenge

More than 1,400 institutions in the United States alone grant a full year's credit to students with satisfactory grades on enough AP Exams.
Meet AP Exams

Expert Advice

Comparing aid awards can be difficult. Be sure that you understand and consider complete, accurate costs at each college, not just tuition and fees.
Compare aid awards
Elsa Heydenreich Clark, Director of College Counseling, Immaculate Heart H.S.

Your Saving Options

Start Saving for College Now

There are several savings vehicles that make saving for college easier. The earlier you begin, the more money you may be able to save. Here are some of the options you may want to consider:

529 College Savings Programs

There are two different types of 529 plans. Both kinds are exempt from federal income tax:

  1. College savings plans are state-managed investment accounts.
  2. Prepaid college tuition plans allows your family to purchase a child’s education at today’s tuition cost.

Read more about saving for college and 529 plans.

Coverdell Education Savings Account (ESA)

This used to be known as an Education Individual Retirement Account (IRA). This type of account lets people put away $2,000 per beneficiary, per year, during 2011 and 2012. The money must be used to pay for elementary or secondary school, or college expenses. The money and the earnings in the account are not taxed until the funds are withdrawn. Withdrawals are taxed only if they are not used to pay for qualified education expenses.  

For example, say you start saving at the birth of a child and save $2,000 per year. If your account earns 2.5 percent interest tax-free annually, the total in the account would be $45,000 by the time the child graduates from high school.

There are income restrictions; your modified adjusted gross income for 2011 or 2012 must be less than $110,000 ($200,000 in the case of a joint return).

Learn more in IRS Publication 970, Tax Benefits for Education. 

Calculate Your Savings

Use our online College Savings Calculator, to see how your savings grow over time.

This information is general in nature and should not be construed as tax or financial advice. Consult your tax adviser or financial planner for more complete information.