Education Funding FAQs

We've gathered answers to your most popular questions below. 

What's on your mind?

It’s never too late to save, but the sooner you start, the better. Starting early can give you a big boost thanks to the power of compounding – reinvesting earnings to generate their own earnings, and so on.

So, even if you can only save a small amount each month, over time that money has the potential to grow into a nice savings earmarked for your young scholar’s future education. 

How much depends on a lot of factors – like where your child goes to school – public or private, in state or out of state – and how much financial aid your child gets. You can’t base your calculations totally on today’s college costs, either because, on average, tuition has increased at about twice the rate of inflation.* To get a better feel for projected costs, this would be a good topic to discuss with a qualified financial professional – like your COUNTRY Financial representative.

It’s true – the typical student can generally get financial aid to help pay for part of their college education. Unfortunately, it probably won’t cover the total cost. And, at least part of the aid will probably come in the form of loans.

Don’t count on scholarships, though. Only about 5.5 percent of students receive scholarship money.1

Like most financial goals, saving for a child’s education depends on your situation. Fortunately, there are a number of choices available to you. The most common are:


Contact a local COUNTRY Financial representative to help you decide which choice may be best for you.

Two common types of education savings accounts are Coverdell Education Savings Accounts and 529 college savings plans.  Money in a 529 can be used for qualifying accredited post-secondary education expenses with no age limitation.

If the funds won’t be used for educational expenses of the named child, you‘ll have two basic options:

  1. The account can be re-designated to another family member without tax consequences, including to:
    • Other children in the family, including stepchildren
    • Grandchildren
    • Parents and stepparents
    • Nieces and nephews
    • First cousins
    • Aunts and uncles
    • Spouse of the designated beneficiary
    • Spouse of any of the above


  2. The account can be closed any time, with the balance distributed for non-educational expenses. The earnings will be taxed as income at the time of distribution and a mandatory 10 percent federal tax penalty will be imposed. The penalty is waived in the event of the death or disability of the beneficiary, or if the beneficiary receives a scholarship.


This is not a complete description. Contact a COUNTRY Financial representative about important differences, retrictions, limitations, etc.

Yes. In most cases, the entire withdrawal (principal and earnings) counts as income on the following year’s aid application.

Before you resort to this, though, remember – you can take out loans for a child’s education. You can’t get a loan for retirement, so if possible, avoid this temptation.

COUNTRY Financial® is a family of affiliated companies (collectively, COUNTRY) located in Bloomington, IL. Learn more about who we are.

The SmartStudentTM Guide to Financial Aid accessed June 6, 2014


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Investment management, retirement, trust and planning services provided by COUNTRY Trust Bank®. 

COUNTRY® Capital Management Company is registered with the Securities and Exchange Commission and the Municipal Securities Rulemaking Board (MSRB).  An investor brochure describing protections that may be provided by MSRB rules and how to file a complaint with an appropriate regulatory authority is available at

For 529 plans, investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. More information about municipal fund securities is available in the issuer’s official statement. The official statement should be read carefully before investing.

The information contained here is general and should not be considered legal or tax advice. Laws of a particular state and your particular situation may significantly affect the general information presented here. The availability of the tax or other benefits mentioned here may be conditioned on meeting certain requirements. State tax deductions mentioned here may only be available if you invest in a 529 plan offered by the state in which you reside. COUNTRY Financial and our representatives cannot give tax or legal advice. You should consult your attorney or tax advisor regarding your specific legal or tax situation.

529 College Savings Plans offered by each state differ in options and benefits. The plan for you depends on your specific objectives and circumstances. Please consider each plan's investment options, fees and state tax implications.

Registered Broker/Dealer offering securities products and services:

COUNTRY® Capital Management Company, 1711 General Electric Rd, PO Box 2222, Bloomington, IL 61702-2222. tel 866-551-0060. Member FINRA.  Read our Customer Relationship Summary and Investor Handbook.

Investing involves risks, including the possible loss of principal.