Potential Magazine Fall 2015 - Alabama Edition | Page 35

BUT WAIT,
THERE’S MORE!
CREATIVE WAYS TO PAY

If a “hobby” scholarship isn’t going to work for
your teen, check out these traditional and more
creative ways to save and pay for college.

529 PLANS invest in mutual funds, stocks, bonds and

money market accounts. As long as the funds are used for a
qualified educational expenses, it is disbursed tax-free. You
are able to participate in the Alabama 529 Plan or in another
state’s plan, so have a qualified financial planner help you
understand the best plan for you.

ROTH IRAS were designed for retirement planning but

do allow you to use them for college expenses. A benefit to
this funding is that it would not penalize a student’s financial
aid consideration (whereas 529 Plans do). However, the earnings on this investment will be taxed by both federal and state
when used for educational expenses.

UPROMISE is an online shopping service that gives you
5-15 percent rebates to use toward a college fund. You have
to be intentional, but there are tons of advertisers on their
site that can contribute to your college fund. You can choose
to have it deposited into a high-yield savings account where
Upromise will match your earnings at 10 percent, have it
deposited into a 529 account or have a check disbursed.

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