Education Savings

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Start your education journey with a
J.P. Morgan Advisor

Develop a personalized strategy for your education goals.

How we make planning for college easier

Explore how investing can fit into your funding strategy, including potential tax benefits.
Together, you and a J.P. Morgan Advisor can create a strategy that evolves to fit your needs.
Benefit from J.P. Morgan’s 200+ years of investment expertise.
Gain an understanding of your full financial picture—all in one place.

Meet with an advisor to learn more about planning for college

We’re with you every step of the way

Starting out

Create a realistic and informed strategy for your education goals with a J.P. Morgan Advisor.

See checklist to learn about starting out

Attending School

Revisit your strategy with your advisor and engage your student with the financial decisions you’re making.

See checklist to learn more about attending school

After Graduation

Take advantage of a Goals-Based Analysis to help your graduate balance multiple financial responsibilities at once. Meanwhile, set new goals for yourself

See checklist to learn more about what happens after graduation

Understand your options

There are a number of ways to pay for education costs. Most families tend to use a combination the options below to pay for college. Each option has its pros and cons, but we can help you decide on an approach that works for you

529 plans

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A tax-advantaged investment account designed as a way to save for education expenses.

Benefits

Investments grow tax free.
Withdrawals aren't subject to federal tax when used for qualified education expenses.
You can front-load your contributions, making five-year gifts in a single year.
Easy to establish and maintain.
Certain states provide state tax deduction for contributions.

Disadvantages

You’re limited to the investment options offered by the 529 plan.
Using the annual exclusion gift to fund a 529 means you can’t use the exclusion for other purposes.

Coverdell/Education Savings Account (ESA)

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A tax-advantaged account that can be used for any level of education and has little impact on financial aid eligibility.

Benefits

Earnings accrue free of income tax.
Distributions may be made free of income tax as long as they're made for qualified education expenses.
Assets may be invested in almost any product, including stocks, bonds and mutual funds.
Easy to establish and maintain.

Disadvantages

Maximum investment is limited to $2,000 per year, per beneficiary. The $2,000 contribution maximum is gradually phased out if your modified adjusted gross income falls between $190,000 and $220,000 ($95,000 and $110,000 for single filers).
Contributions must be made before the beneficiary reaches age 18.

Custodial accounts

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Specialized accounts that can be used for a child's general benefit, not just for education.

Benefits

The UGMA (Uniform Gift to Minors Act) and UTMA (Uniform Transfer to Minors Act) are custodial accounts that can be applied across a variety of financial needs, not just college funding.
The custodian can invest the account’s assets in any manner they choose.

Disadvantages

Custodial accounts are considered assets of the student and are turned over to them when they reach the age of maturity, and also may limit financial aid eligibility.
Using annual exclusion gifts to fund an UTMA account may prevent the use of the exclusion for other purposes.
These accounts are typically taxed at the same rate paid by the parents.

Financial aid

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There are a variety of financial aid packages, from scholarships to federal student loans. These options can be used to supplement your education savings.

Benefits

Often, grants and scholarships don't have to be paid back.
Federal student loans are easy to apply for and offer flexibility when it comes to repayment.
Student loan interest can be tax-deductible.

Disadvantages

Merit-based scholarships can be very competitive and not everyone qualifies.
Only 0.3% of students receive enough free aid to completely cover their education.
32% of financial aid is disbursed through federal loans that need to be paid back with interest.
Today, a record 4 in 10 households owe student loan debt.

Explore ideas and strategies to make your education goals a reality

Goal setting

Utilizing a goals-based approach for your investment journey can help keep you on track.

Learn more about goal setting

Power your portfolio with compounding

Compounding sounds complicated, but it is a simple concept that's one of the most powerful tools you can utilize when it comes to growing your wealth.

Learn more about compounding your portfolio

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