For many people, higher education means opening a pathway toward greater opportunity — and eventually, greater earning power. Unfortunately, taking the first step on that pathway can also lead to detours into debt.
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Whether you’re looking to pay for that masters degree that could lead to a promotion, give your kids a financial leg up in applying for college, or help you get a professional certification at a local community college, you may feel like the costs outweigh even the greatest benefits.
However, there are some surprising ways to clear that path. Your local bank or financial services provider might not be the first place you’d turn to for funding education, but it offers a diverse range of resources that can help make paying for future schooling much easier.
GOBankingRates chatted with a few experts who had insights into the kinds of financial services you should investigate if your goal is to someday stride down the aisle in a cap and gown or to watch your kids do the same.
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Savings Accounts
According to Curt Scott, president and investment advisor representative at Scott Financial Group, some banks offer specific education savings accounts that can help set you up for success, specifically the 529 plans and Coverdell education savings accounts.
“Both can be used to grow and pay for educational expenses tax-free if you use them correctly and follow the specific guidelines of each type of account,” he explained.
He’s quick to add that even more traditionally known savings accounts can serve a purpose in getting you to the hallowed halls of higher learning.
“While they may not offer the same tax advantages as education savings accounts, high-yield savings accounts and CDs may be used to save and earn interest on money that can be used for college,” he added.
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Loans
Student loans are likely the first things you think of when you’re considering going back to school.
Banks offer a variety of loans to service different purposes, including private student loans, home equity and personal loans. Scott shared that while each type of loan comes with its advantages and disadvantages, they can all be used for education expenses.
However, before you hit the books to earn your degree, you should put on your thinking cap and dive into learning more about the ins and outs of each loan and how it can impact your financial vitality long-term.
“I would encourage individuals to work with a financial professional, either within the bank or an independent financial advisor, to learn how each works and how they might fit into their college tuition payment plan,” he added.
Credit Cards
Giving a credit card to a college student may seem like a risky proposition, but if your student is responsible, it can actually help them with education-related expenses while enabling them to earn an A+ in mature financial practices well past graduation. Patrick A. Milas, CFP, CEPA, senior financial planner at Citizens Wealth Management, encouraged you to consider a credit card as a valuable resource.
“Once a student enters college or university, they should have a credit card that has specific benefits tailored to the life of a college student,” he said. “Having a credit card that offers rewards or cash back for education-related expenses can help build positive habits and establish the user’s credit. Credit cards should always be used responsibly.”
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This article originally appeared on GOBankingRates.com: I’m a Banking Expert: 3 Ways Your Bank Can Help Fund Your Education
