Saving for college made easy
Saving enough for college might seem impossible. But families like yours are doing it every day, and it's easy for you to start too.
You can do it
Millions of American students are entering college for the first time. For many of them, their college journey began when loved ones started planning and saving to make the college dream a reality.
Like you, these families had lots of questions along the way. And that's why we're here—to help you get started with your college planning. It only takes 3 steps, so you can begin today.
- Find the right kind of account for your college savings.
- Choose investments for your account.
- Open the account online.
Open a Vanguard 529 account
Test your knowledge!
When it comes to saving for college, there are a lot of myths out there. What's true? What's false? We have the answers.
False. About half of all American families are currently saving for college. And you don't need a lot of money to get started. The most important thing you can do right now is to take the same first step they did: Open an account.
Most likely false. Getting a full scholarship or enough financial aid to cover the whole cost of college is unlikely. Only a small percentage of students have their entire tuition covered, let alone housing, books, and fees. (And, in case you were wondering, an even smaller number of students pay for college by winning the lottery.)
True. It's never too late to start saving for college. The more you save now, the less you'll have to borrow. So if your child is in high school, don't let that stop you.
False. Even if you save in a type of account that's specifically meant for college, you can use the money to pay for many trade and vocational school expenses. Or you can give the money to someone else (a qualified family member) to use for college or even graduate school. Even the least flexible account types will give you your money back for whatever reason, no questions asked, although you may have to pay taxes or penalties on any amount your account has earned (but not on your contributions).*
True. It's easy to figure out what account type best fits your needs. As for figuring out which college meal plan to choose … we can't help you with that.
False. The amount you've saved for college or any other goal has much less of an impact on your financial aid than your overall income does. In other words: If your income is high enough, you'll be expected to pay for at least part of your kid's college expenses, whether you bothered to save anything or not.
Questions? No need to raise your hand—ask away
How much do I need to know about investing to manage a college account?
Some types of investments can be managed for you, like age-based options offered through 529 plans. But it's also good to have some basic investing knowledge—it's not hard to learn, and it will help you save for any goal. We'll teach you the few important things you need to understand.
How should I balance college saving with retirement and other goals?
There's a definite order in which you should approach financial goals. We've spelled it out.
Am I going to lose this money if I don't use it for college?
Nope. Depending on whether you get tax breaks for your college savings, you might have to give up some of your earnings, but not any of the money you've saved.*
When's the best time to start saving for college?
The earlier you tackle college saving, the better off you'll be in the end. The best time is now.
What's the best kind of account for college savings?
For most people, it's a 529 account, and here's why—tax breaks equate to more money in your account and less you have to borrow. But there are also other options.
Get the basics on college saving
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The Vanguard 529 Plan
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*If you received a tax deduction on your contributions, your state might require you to pay it back if you use the money for expenses that aren't qualified. Some states also adjust the amount owed for inflation.
All investing is subject to risk, including the possible loss of the money you invest.