Education Savings Accounts – The Basics (I)

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If you have kids, or are thinking of having kids, one of the biggest concerns you will have in the future is paying for their education. While you may say “Why worry about that now? That’s not going to happen for another 18 years!” its really important for you to think about it now. Costs of college education are rising exponentially. Colleges that cost only $500 a semester in the 1970’s now average over $9,000. The long term trend for college tuition is that it rises about 6% above the inflation rate.

If you are not saving for yourself, you may want to consult this article. If you’re on the right track there, you can start to look at education savings accounts. There are several types that you can use:
– Pre-paid 529 Plans,
– Investment 529 Plans,
– Coverdell Education Savings accounts,
– UTMA (Uniform Transfers to Minors Act) accounts
In the next few articles I’ll cover how each of these works, which ones may be a better choice for you, and where you can find Shariah compliant offerings for each of these.

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