INVESTING: Hitching a Ride On Tuition Bills

Hitching a Ride On Tuition Bills

Few expenses are spiraling out of reach faster than college costs, which have been increasing about 7% annually. How is a family's nest egg supposed to keep up? A new special-purpose financial institution, the College Savings Bank of Princeton, N.J., is offering a novel solution: a certificate of deposit featuring an interest rate tied to an annual index of higher-education costs. Says Bank Chairman Peter Roberts: "With us, families have shifted the risk ((of rising tuition and inflation)) from the household to the bank." Even if a child skips college, the parents can still cash in the CollegeSure CD for the...

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