Grandparents may want to start thinking now about how they can help pay for their grandchild’s college. Suzanne Hall, senior vice president of WesBanco Securities, said a solid financial college tuition plan should be in place for at least 15 years. Grandparents can start such a plan, or contribute to one already set up by their children. “A good plan initiated when a child is 3 years old should produce enough money for college when the child reaches the age of 18,” Hall said. She said trends indicate the cost of a four-year education in public or private colleges has nearly doubled since 2007 and they will likely double again over the next 10 years. According to Hall, a systematic investment plan typically produces more yield than a traditional savings account. As an example, she said a monthly investment of $50 — assuming the investment earned a hypothetical 8 percent rate of return — will produce $24,004 over an 18-year period while a typical savings deposit account will yield around $9,000. “People not familiar with investment strategies may want to find a financial counselor,” she said. “There will be an upfront fee, but the return will be worth it.” She said advantages in an investment plan are that it gives you a systematic and consistent savings and all gains are tax-free on the federal level if the money is used for higher education. Hall points to The Smart-529 plan offered by the West Virginia College Prepaid Tuition and Savings Program Board of Directors. “Parents or grandparents can name a specific child as beneficiary of the account and, if that child gets a financial scholarship or decides not to attend college, a second child can be added as beneficiary,” she said.
