Episode Overview

Title: College Is Expensive. Here’s How Smart Parents Plan for It
Host: Nicole Lapin
Podcast: Money Rehab (Money News Network)
Date: February 23, 2026
Theme:
Nicole Lapin, a financial expert and new mom, tackles the challenge of planning and saving for kids’ education in an ever-changing landscape. She demystifies options for parents at every stage, from pregnancy to college, debunks misconceptions, and reveals underrated strategies to make college savings work harder, smarter, and more flexibly—no matter your child’s path.

Key Discussion Points and Insights

The Modern Challenge: Planning as Education Evolves

• Nicole reflects on the wide range of educational paths (four-year universities, trade schools, community college, apprenticeships, entrepreneurship), explaining that today there’s no “one-size-fits-all” approach.
  • Quote: “How we save for their future needs to reflect those choices. It is definitely not a one size fits all model anymore, but the good news is we have options.” (02:18)

Saving from Day One: 529 Plans

• 529 Plan Overview: The 529 is Nicole’s top recommendation at any early stage (from pregnancy onward) for its flexibility and powerful tax advantages.
  • Quote: “It’s not flashy, it’s not new, but it works.” (02:33)
• Key Benefits:
  • Tax-advantaged growth and withdrawals when used for qualifying education expenses (tuition, books, housing, laptops).
  • Can be opened before the child is born and transferred later.
  • Power of compounding: Example—$250/month from birth could grow to ~$138k by age 18 at typical stock market returns.
• State Perks: Some states offer extra benefits.
  • Quote: “In Maine, they will give you a $500 jumpstart just for opening the account through the Alphond Grant program. We love free money.” (03:32)
• Contribution Limits: No federal cap, but states set high aggregate maximums; beware of federal gift tax triggers at $19,000/year (2026), but there’s a “superfunding” option: front-load 5 years ($95,000) with no yearly gifts for the next four years.
• Withdrawals: Penalties apply if funds are not used for education (with few exceptions).
• Family/Friends Contributions: Use “Ugift” links so others can contribute instead of traditional gifts; credit card reward programs (e.g., Fidelity, Upromise) can also direct rewards to your 529 too.
  • Quote: “For my daughter's first birthday and the holidays, trust me, I sent that link out to everyone who was planning on giving her a gift. She said all she wanted ... was 529 contribution anyway.” (05:16)

Elementary & Middle School: Catch-Up Tools

• Coverdell Education Savings Account (ESA):
  • Cap: $2,000/year; income restrictions apply.
  • Broader usage: K-12 private tuition, tutoring, laptops.
  • Quote: “The big benefit is flexibility... those all qualify.” (06:36)
• Custodial Accounts (UGMA/UTMA):
  • Not limited to education—can be used for “anything that benefits your kid” (first car, business, home down payment).
  • Caveats: Once child becomes a legal adult (18/21), funds are theirs—no restrictions.
  • Can impact financial aid eligibility more than a 529.
  • Quote: “Once your kid hits the age of majority, the account is theirs, no strings attached... even if it’s not your top choice.” (07:33)

New in 2025: Trump Savings Account

• Who’s eligible: U.S. children born 2025-2028 get a $1,000 federal government starter.
• Annual contributions up to $5,000 (including $2,500 from employers/nonprofits).
• Must be invested in S&P 500 index funds, no access until age 18 unless rolling over.
• Not a full 529 replacement; fewer tax/flexibility perks, more restrictions.
  • Quote: “Free money is free money. This kind of account isn’t something that should replace a 529 plan. It should just complement it.” (09:00)

High School and Beyond: Prepay & Last-Minute Moves

• Prepaid Tuition Plans:
  • Available in states like Florida, Texas, Virginia; lock in today’s rates for public college.
  • Savings can be significant, given rising tuition.
  • Plans are flexible with transfer and refund options.
• If College is Imminent or Underway:
  • 529s can still help—covering more than tuition (room and board, books, computer, necessary internet).
  • Quote: “Most people know that it can be used for tuition, but fewer people realize ... it can also cover room and board as long as your child is enrolled at least half time.” (10:56)
  • Leftover funds? Now possible to roll up to $35,000 from a 529 into a Roth IRA for the child if the account is at least 15 years old.
    • Quote: “That means your college savings can seamlessly turn into retirement savings. A jumpstart like that could be worth hundreds of thousands of dollars by the time your kid is 60.” (11:18)
• 529s now valid for trade school, apprenticeships, some international school expenses—education is more than four-year college.

Notable Quotes & Memorable Moments

• On the emotional side as a new mom:
  “If that's you right now. First of all, I feel you. My daughter just went through sleep training, so I am 90% caffeine right now and barely functioning.” (02:33)
• On missed deadlines and luck:
  “My daughter missed this deadline by a couple of weeks, but that my 2025 one. Anyway…” (08:57)
• On best practices:
  “No matter where you are in this journey or how much you can realistically save, what really matters is just getting started. Even small, consistent contributions can grow into something meaningful.” (12:12)
• On choosing the best 529 plan:
  “Look into opening a 529 plan in a state that offers better benefits for you. Even if you don’t live in that state yet, you are not locked into your home state’s plan.” (12:18)

Timestamps for Key Segments

• 01:37 – Nicole’s perspective as a new mom facing educational savings decisions
• 02:33 – Why start a 529 plan early and how they work
• 04:18 – How much to contribute, gift taxes, "superfunding" hack
• 05:16 – Family and friends 529 contributions, rewards programs
• 06:31 – Coverdell ESAs: How/when to use
• 07:10 – UGMA/UTMA accounts: Flexibility and cautions
• 08:33 – Trump Savings Account: Eligibility, features, & limitations
• 09:53 – High school years: Prepaid tuition, late starts, and flexibility
• 10:56 – Using 529s in college: Costs covered, rollover to Roth IRA
• 12:18 – Final actionable tip: Shop for the best 529 plan, not just your home state

Practical Tip to the Bank

“Look into opening a 529 plan in a state that offers better benefits for you… Treat it like any other investment account and do your homework.” (12:18)

Conclusion

Nicole Lapin equips parents with a clear, current map of education savings—explaining the strengths and quirks of each tool, rooting advice in both expert know-how and lived experience as a parent. Her core message: Get started in any way you can, be strategic about plan selection, and update your approach as your child’s needs evolve. The smartest path is the one you use—consistently and thoughtfully.