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Great ways to fund a college education

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Borrowing from your retirement plan

In many cases, an employee can borrow from his or her retirement plan in the form of a loan. Is this a good idea? Frankly, no. If you withdraw funds early from a Traditional or Roth IRA, you'll open the door to stiff IRS fees and penalties. Plus, you'll be taking away money that was fueling your retirement savings portfolio. To read more on this topic, check out Borrowing from Your 401(k): Think Twice.

Community college

Given the high price of both public and private four-year colleges, many students take advantage of the community college system by attending for two years and then transferring to a four-year college to receive their degrees. This can be a substantial savings, especially if your child lives at home for the first two years of college.

Postcollege employment

In certain career fields, such as nursing and teaching, students may have their loans forgiven or tuition paid in exchange for committing to a period of work in a specified place upon graduation. College advisors can provide more information on these kinds of programs.

ROTC/armed forces

For students who commit to military service after finishing school, the benefits range from partial to full payment of undergraduate and graduate costs. You can find more information on various military careers and the educational benefits available at and the Veterans Benefits Administration Web site.

Affinity programs

Savings clubs such as Upromise work like frequent-flier programs. You get points for purchasing goods and services from participating merchants. These points are translated into money that's invested in a state-sponsored college savings plan. Because merchants pay to participate in the program, there is currently no charge to enroll. To learn more, read "Savings Clubs Can Supplement a College Fund."

Comments from readers

"This article has not been updated in March 2009 regarding the Hope Credit; the Hope Credit is now $2,500, or a matched amount for the first $2,000 and 50% of the next $1,000. Also,it can be calimed for al four years of college rather than the first two as before."