Part IV

Filling In the Gaps: More Ways to Save for College

In this part . . .

Very often, life is way too uncertain to be able to set aside a given amount of savings and say, “This is for college, this is for retirement, and this is for my new-furnace savings account.” Even if you’re able to have a specific account for every one of life’s future events, how can you possibly know that you have enough in each account to cover the full cost of each event? And when you look at college savings, in particular, you need to cover many college-related expenses that aren’t the so-called “qualified educational expenses” to which Section 529 plans and Coverdell accounts restrict your spending. You need a way to pay for these additional costs, too.

In this part, I explain other savings options available to you — options that don’t require that you use your savings for future college expenses, but that don’t prohibit you from doing so. In some cases, taking savings from these places to cover college expenses will make perfect sense; in others, you may want to liberate money from these accounts only in an emergency.

Finally, I also use this part to look at the options available to you if you haven’t been able to save enough to pay your student’s full educational costs — scholarships, grants, and loans.