Gov. Jon Huntsman Jr. has declared September as "College Savings Month" from an article in the Salt Lake Tribune, to encourage Utahns to save for their children's education. You can get information about "The Utah Educational Savings Plan" at www.UESP.org or calling 800-418-2551.
This must be the law of attraction or something like that. I had drafted an article on Real Estate as a College Fund. This is not a new concept but one that is starting to catch momentum, especially among grandparents. Grandparents typically are more liquid and they can benefit from it financially also.
The more I think about this the more it makes sense to me. One set or both sets of grandparents can join forces for more leverage.
They buy rental properties with a large enough down payment to enjoy cash flow with a 15 year mortgage. Using a property management company of course (they don't want to mess with tenants). They can use the cash flow for themselves or pay down the note faster and have tax benefits too. There are many financial benefits of owning investment properties. The idea is at the end of 15 years the property(s) are paid off and all the rent minus expenses would go toward college expense or the property(s) can be sold at the current market value. We all know no matter what the condition of the current market is in, 15 years from now all real estate will be worth a lot more.
I like the idea of creating some form of trust to own the property and it is passed down generation to generation for education. Please seek advice from tax and estate planning professionals.
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