Did you know grandparents can help pay for college? Find out how!

Affording college can seem like an impossible task, especially without any help. Student loans can feel overwhelming and the idea of paying them back after graduation can be scary. Family is usually what most students rely on for help before taking out loans and creating a financial burden for themselves. When a child is born their family is typically already planning for his or her educational future. Every family wants their children and grandchildren to go to the best college and get the best education possible. Grandparents are the best spoilers for their grandchildren especially since they realize how expensive life can get and how much they want to help toward the future of their grandchild.

How can grandparents help pay for their grandchild’s college? There are many different ways a grandparent/s can help. For starters, the grandparents can set up a trust fund for the child. According to Online Stock Trading, a trust fund is, “a savings account of sorts, which is used to benefit a person, persons or a charity or organization. A trust fund is typically opened by a benefactor, the person wishing to protect their assets for another institution or person. A trust fund can be used by a parent or parents to cover their children's future needs, by any relative in fact such as a grandparent looking to provide money or future assets to a loved one.” This is perfect for children because most trust funds can be set up so they child is not allow to touch it until a certain age.

Another great way for willing grandparents to help their grandchildren financially for college would be to set up a 529 educational savings plan. The money invested in this plan is for future college costs for the child. Grandparents can set up their own 529 plan for their grandchild, or if the parents of the child have previously set up a 529 plan, grandparents can add funds to this plan making the investment greater for the child’s future.

Bond funds are another common way for grandparents to help contribute to their grandchild’s educational future. Bonds are usually safer than stocks because the money lent initially and interested gained over time is promised to be returned by the borrower, unless the government or company goes bankrupt. Stocks seem to be the more risky of the two options.

As you can see, there are many ways that willing and able grandparents can help their grandchildren pay for school. Figuring out which plan is best for each individual situation will take some time and research. Helping fund your grandchild’s educational future may lead to personal financial burdens so make sure that before you invest you can afford the risk of investment.
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