A Parent’s College Savings List – Part 2 Contribution Investment Limits & Eligibility
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Receiving a college education may be the single most important accomplishment that one may achieve in their entire life time.
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It’s important to research college savings options carefully, just as you would research any investment opportunity. The following are a few of the many investment questions you should ask about each college savings option presented here:
Contribution and Investment Limits
- Are there annual and cumulative contribution limits? What is the maximum investment?
- What is the minimum investment?
- What are the payment options, such as lump sum, monthly installment, charging a credit card, payroll deduction, and electronic funds transfer (EFT)?
Eligibility
- Who is eligible to participate in the plan? Must the student (or a parent) be a state resident? What if you move out of state? What happens if the family moves out of state but the child still attends a participating school?
- Who can make contributions to the account? Can grandparents and friends of the family contribute, or just the parents?
- Are there any age restrictions? Are there age restrictions on when you can open an account (i.e., before the 9th grade) or when you can contribute (i.e., until age 18)? Are there age restrictions on when the funds must be used (i.e., until age 30 or until 10 years after high school graduation)?
Up Next : Part 3 Beneficiaries, Distributions & Qualified Expenses