Multiply the above numbers by 4 and that's the total cost of four years of undergraduate or four years of medical school. If your child goes to medical school, the cost of an in-state undergraduate degree plus medical school would be $248,180, and the cost of 8 years at a varsity school would be at least $445,496!

According to statistics, 70% of American college students in school have student loans, and 1 out of 4 working adults are paying back their student loans. The data from the U.S. Department of Education shows that the per capita amount of student loans is $37,000, and the per capita monthly payment of student loans is $393. The interest rate of student loans ranges from 5% to 10%, and even 13% for some people, and the data shows that 1/4 of the people have not been able to pay off their student loans, and the student loans are like a snowball rolling more and more. Many people spend their whole life paying back their school loans.

529Plan

A 529 Education Fund Plan is simply a tax-advantaged savings vehicle that helps investors keep their money in a stable, appreciating account for future educational expenses. 529 Education Fund Plans are named after Section 529 of the Internal Revenue Code enacted in 1996, and today every state in the United States has at least one 529 plan. These plans are essentially operated and administered by state agencies and large management companies.

When you start investing in a 529 plan, the profits are tax-free and you will not be forced to deduct a portion of the money for tax purposes; the money you invest will grow at compound interest. In addition, if the money is ultimately used for educational investments, no taxes will be levied when you use it. For example, if the money is used to pay for tuition, mandatory education fees or books.

However, if you use the money for any non-educational expenses it will trigger the non-compliance limit, so all of the earnings will be subject to federal tax and the 10% penalty on regular income at the time they are used. In addition, you may be required to repay any tax benefits you previously received for investing in a 529 plan.

529 plans are used to pay for a large portion of educational expenses, such as tuition and mandatory education funds for legal educational institutions, books and tuition, electronics needed at school, such as printers, computers, educational software and network equipment, room and board at school, or off-campus rentals. Of course, you may need to be aware of expenses that cannot be used for this purpose.

In addition to 529 plans, many parents will purchase a savings life insurance policy for their child at birth. Because of the young age of the child, there is often a significant advantage in premiums. Parents can purchase a product with a high amount of coverage at a lower price. The child starts college at about age 19, and over the course of 19 years, the cash value in the life insurance policy accumulates. When the child starts college at age 19, a substantial fund can be withdrawn for the child's college expenses. There are no restrictions on the use of the money withdrawn compared to a 529 plan, and the child can use it for any legitimate purpose. In addition to this, the money is not taxable. When withdrawals are stopped, the policy remains in place and can continue to be used for cash value growth.