Today, there's more reason than ever before to put money aside in an account with growth potential:

• A four-year college education can cost well over $120,000 today.
• At highly selective colleges and universities, just one year of tuition, room, and board can top $40,000.
• Historically, college costs have risen at a rate exceeding the rise in inflation. (The College Board, Trends in College Pricing)
• Between 1972 and 1995, the percentage of high school graduates going on to college increased from 49% to 62%. (US Dept. of Commerce, Bureau of the Census)

The best reasons to save, of course, are your children themselves, since higher education can provide opportunities and earning potential far beyond those available to high school graduates. Find answers below to some of the basic questions on saving for college.

• How do people pay for college?
• How much will you need to save?
• How can you save enough?
• What's the best account type to use?
• What is the benefit of saving in socially responsible investments?

How do people pay for college?
According to the US Department of Education, families with children in college today rely primarily on the following three sources for college expenses:

• Personal savings,
• Current income, and
• Loans.

More than half of today's college students receive some form of financial aid, which comes in the form of:

• Grants and scholarships - Tuition, fee, and/or expense payments based on academic or athletic achievement or on need. Federal grant programs include Pell Grants and Federal Supplemental Educational Opportunity Grants.
• Work-study Programs under which students can incorporate paying work with their academic studies. Programs vary greatly and are offered by many entities: colleges and universities, the federal government, some state governments, etc.
• Loans to students and/or parents Loans represented more than 60% of financial aid in 1999-2000

Note that the federal student loan interest deduction provision allows an above-the-line deduction for interest paid in the first 60 months of repayment on private or government-backed loans for post-secondary expenses for tuition, fees, books, equipment, room, and board. (You do not need to itemize in order to claim the deduction, whose maximum is now $2,500. Income restrictions apply.)

Hope Scholarship Credit
As a student in the first two years of college (or other eligible post-secondary training), you are eligible for a tax credit equal to 100% of the first $1,000 of tuition and fees and 50% of the second $1,000 (the amounts are indexed for inflation after 2001). This credit is available for each student's net tuition and fees (less grant aid) paid for college enrollment after December 31, 1997. (The credit is phased out for joint filers with income between $80,000 and $100,000 and for single filers with income between $40,000 and $50,000 (also indexed for inflation after 2001). The credit can be claimed in two taxable years (but not beyond the year when the student completes the first two years of college) for any person enrolled on at least a half-time basis for any portion of the year.

Lifetime Learning Credit
For college juniors and seniors, graduate students, and working people upgrading skills, there is a 20% tax credit for first $10,000 of net tuition and fees paid for post-secondary enrollment after June 30, 1998. The credit is available on a per-family basis, and is phased out at the same income levels as the HOPE Scholarship.

How much will you need to save?
Each person who is saving for a child's or children's education has unique needs and resources, so there's no one-amount-fits-all answer. Use the College Savings Calculator, an interactive online tool to project costs for one or several children, using different assumptions for variables like investment return, education-cost inflation and amounts saved. Determine how much you might need to save, then do more detailed planning with your financial advisor. If you do not have a financial advisor and would like help finding one, use the free Calvert Advisor Finder^TM Service.

How can you save enough?
Recent changes in the US tax law make it easier, and more advantageous from a tax perspective, to save for college. Tax-deferred or tax-free compounding of assets in a college savings account can be a powerful tool to help you save the money you'll need to fund all or part of a child's education.

The Value of Starting Early
The sooner you start saving for a child's education, the more you can rely on savings in a tax-deferred or tax-free investment to help:
Average Annual Investment Return	8%
Annual Tax-Deferred Contribution	$2,000		$3,500
Age of Child at First Contribution	1	7	1	7
Account Value: Child Reaches Age 18	$80,893	$40,991	$141,562	$67,956

What's the best account type to use?
Accounts offering tax-advantaged saving specifically for education are the 529 Savings Plan and Coverdell Education Savings Account. Assets in some other tax-advantaged accounts may be used for education without penalty. These include the UGMA/UTMA custodial account and Roth IRA.

Assets from a Traditional or Rollover IRA may also be used without penalty for qualified education costs, though income taxes likely apply to distributions.

The advantage of saving in a tax-deferred account
Over time, saving in a tax-deferred account can be significantly more beneficial than saving in a taxable account.

Assuming an 8% rate of return, a combined federal and state tax rate of 28.5% for the taxable account, an initial contribution of $1,500, and a monthly contribution of $250 each month for 17 years, the difference between saving in a tax-deferred account and a taxable account could be $22,372:

	Tax-Deferred Saving	Taxable Saving
Initial Contribution	$1,500	$1,500
Monthly Contribution	$   250	$   250
Average Annual Return	8%	8%
Federal/state Tax Rate	N/A	28.5%
Account Balance After 17 Years	$110,462	$88,090

Among the accounts in which you might save, the best to use depends on your own situation and that of the person for whom you hope to save. It's a good idea to inform yourself about all your choices.

If you have maximized contribution opportunities or do not qualify to contribute to a tax-advantaged plan, you may want to consider investing for education in a taxable account.

What is the benefit of saving in socially responsible investments?
You know that investing for college has to be about ''how much.'' You need to focus on accumulating the amount you'll need to fund all or part of a child's education. To do that you have to focus on how much your money can earn. But paying attention to ''how much'' doesn't have to mean ignoring ''how well.'' After all, when the child you're educating goes out into the world, you want it to be a safe and healthy place to make a life.

Like saving for college, addressing social and environmental concerns can appear overwhelming. Fortunately, both can be effectively addressed in the same ways: don't ignore the challenge; don't put off the solution until it's too late; start now, even if you have to start small; every little bit counts.

For more information on the DC College Savings Plan, please contact your financial advisor or call 800.987.4859 (800.368.2745 for non-District residents).  An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing.  The District of Columbia College Savings Trust Program Disclosure Booklet contains this and other information.  Read it carefully before you invest or send money. An investor should also consider, before investing, whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's 529 college savings plan.