The following calculators will help students and their families determine the best way to save for and pay off education-related expenses.
Coverdell ESA With the new
Coverdell ESA (formerly known as the Education IRA) your contributions can grow tax-deferred and distributed income tax-free as long as distributions are used for qualified education expenses. These costs can include school uniforms, computers, and transportation for elementary or secondary school, public, private or religious.
An annual limit of $2,000 per year for any individual under age 18 applies. Once the beneficiary reaches age 18 they can take control of the account but funds must be used by the time the beneficiary turns 30 years of age or transferred to a younger sibling.
529 Plan
With a state-sponsored 529 College Savings Plan your contributions can grow tax-deferred (some states allow contributions to be partially or completely deductible) and distributed income tax-free as long as distributions are used for qualified education expenses such as tuition, fees, room and board at higher education institutions.
There is no limit on contributions but some states tend to limit contributions once the plan assets have reached a defined maximum (typically $200,000 - $250,000). You may make contributions of up to $55,000 per beneficiary in a single year without triggering a federal gift tax. Married couples may contribute $110,000 per beneficiary in a single year.*
Student Loan Repayment When you borrow money for college you might not be thinking about your ability to repay the loan once you graduate. Outstanding student loan balances may infringe upon your ability to qualify for a home, auto and other personal loans. Use this
loan repayment tool to help gauge the feasibility of servicing your debt payments with your anticipated future income.
