Make Smart School Selections to Save

It is important for parents and children to work together when it comes to selecting a college. There are a number of factors that influence this choice. Parents often what to find a school that offers a quality education at a reasonable cost. Students may be more concerned with finding a college or university that offers a specific type of program.

They may even want to choose a school because of where classmates are going. Compromise is essential when selecting an institution of higher learning. This is true whether tuition is being paid by parents or through financial aid. Researching individual schools is a part of making this decision. It is also a good way to save money while finding a good college.

Local Educational Opportunities

The most economic option for earning a degree may be in your local area. This ultimately depends on what city you live in. There are schools in many areas that provide students with ways to save on their college education. High school guidance counselors are often a good resource for this information. Even colleges that are within a short distance from home can be a viable opportunity.

Scholarships and Grants

Scholarships and grants can open many doors for students. These can provide for an education within the state that they live in. In some instances, these resources allow students to travel away for their education. Applying for scholarships and grants is very important. Juniors and seniors in high school should begin finding these opportunities. Eligibility is generally a part of this process and is essential to qualifying.

Affordable Tuition & Board

Making a list of certain schools that interest you is a great way to make a selection. While you are listing these schools, you should also look at the costs associated with each institution. Those that have the most affordable tuition, room and board, and other essentials are good candidates. These schools must also offer degree programs that fit students’ goals.

An economical education has a host of benefits. This means that they can be paid for with little or no concern. Parents and students working together can find institutions that fit into this category. Taking advantage of opportunities that are available to them, students can acquire an excellent education and save at the same time.

Affording College

For those looking at post-secondary education, the costs associated with a college degree can be staggering. Total student debt for all American college students is estimated at $1 trillion (source: CSNBC), while the average cost of a 4-year college program is over $23,000. With the cost of education on the rise, understanding the financial options available can help ease the burden of a college education on both students and their families.

529s

Registered educational savings plans can help to afford college expenses. Money can be added at any time, tax-free. While these savings plans are best used to incrementally set aside money as the student grows up, they can be started at any time as long as the student it’s intended for is under the age of 18.

Scholarships

There are several types of scholarships which may be available to your student. Many colleges offer competitive entrance scholarships as a way to attract the best and brightest. Students with higher high school academic achievements may be eligible for larger scholarships. If your student is involved in sports, look for available athletic scholarships. There are also many private scholarships and grants associated with specific colleges which have been set up by alumni. Be sure to check out what awards may exist for upper-level college students- some internal awards are only available to students entering their final year of college.

Financial Aid

A college or student loan works just like any other bank loan. Generally student loans are offered with a lower rate of interest for the time the student is in college, although loan scheduling and details will depend on the financial institution. Federal loans are also available to both students and parents, and are a highly common method of financing college educations.

Student Employment

Student employment is another financial option available to support education. Students generally find jobs during the summer months between years, but many are choosing to balance their studies with part-time work during the school term. Student employment can be a great way to make some much-needed cash, as well as provide valuable work experience. Many colleges coordinate paid co-op or internship opportunities, and some colleges offer work-study programs which provides on-campus jobs to students. Exploring employment options or part-time study may find other ways to pay for college without sinking into debt.

Two Plans for Parents for College Funding

If you haven't already decided on a vehicle for saving for your child's higher education, think about a couple of choices that have worked well for many other parents in planning funding for college. 


As always, it's best to speak to your personal financial advisor about what plan is best for your family. While I don't particularly endorse or recommend one savings plan over another, below are two possible options that have been in the news recently:

Upromise® for College

A small play on words (you promise) sets the tone for this plan, which originated in 2001. It is free to join and is based on your spending habits. Purchases you make earn as much as 25% cash back in a college fund or just a savings plan. This system works if you don't fall into a trap of buying some things just to get money back.

Some of the items that pay you back are groceries, online shopping, travel purchases, and dining out. Upromise® requires you to register credit cards, grocery cards, and debit cards along with your contact information.

While this sounds a little scary, it is necessary to be sure you get your full credit on purchases hassle-free, and the plan has been around for some time and has proven to be very reputable.

The 529 Plan

Named after Section 529 in the IRS Code, this plan is sponsored by educational institutions or individual states themselves. Every state now has at least one 529 Plan. The 529 offers flexibility in where a child goes to school because it is not state specific when the funds are withdrawn. Your child can live in one state, have a 529 in another, and go to college in a third state under most plans.

States regulate the plans they offer, so all regulations are not completely the same from one to another. A state is not limited to just one plan either, but may offer several. If the plan you choose meets the basic requirements, you have tax benefits for choosing to save in this manner.

The Difference Between Plans

The most obvious difference between the two plans is that the 529 has tax incentives, but it is also strictly a savings plan where you must take money and put it in the kitty.

Upromise® is a way to make money on the necessary and usual expenses in your life. Vendors who agree to Upromise terms do so to acquire your business, which is a good concept as long as you don't pay too much for the products or services or purchase items you don't really need.

You may find other college saving plans that suit your financial situation better or can be used in conjunction with either of these. The important thing is to find some way to put money back for this important part of your child's life, and the earlier you start the better.

Summer Jobs for High School Seniors

As students wrap up their Junior year and prepare for their last year of high school, the long summer months may seem like an excellent reprieve from testing and studying. While I recommend that students take time to enjoy their summer vacation, it’s worth noting that these months provide an opportunity to not only earn money for upcoming college expenses, but also to round out your fall college applications. Here are some job ideas that can help you on both fronts:

Tutoring

Tutoring is an excellent way to keep your studying skills fresh and demonstrate that you are committed to education. With three years of high school under your belt, summer may be a good time to offer your help to younger students and make some extra cash. Consider which subjects you’re especially good at (B+ or better) and which you have a passion for (as it can be difficult to teach subjects that you don’t enjoy yourself), and then post your name in your high school guidance office or around the neighborhood to offering tutoring.

Sports Training

Are you a particularly good athlete, or have an interest in kinesiology?  Consider offering sports training or joining a sports league that allows high-school aged coaches or officials. Being involved in sports demonstrates to college officials that you’re a team player and you have demonstrated leadership skills – both positive attributes in a college applicant.

Internships

If you’ve narrowed down your focus to a particular industry or job area, internships are a great way for you to get a true taste of what your future career may look like. Don’t be afraid to approach companies in your community which match your interests and ask about paid summer internships – often businesses are looking for summer students to help cover vacation time taken by full-time employees.

Service Jobs

It may not sound glamorous, but taking a service-oriented job such as retail customer service or waiting on tables can still round out your skills and demonstrate that you can be relied on to be a good worker. Larger corporations such as McDonald’s often have student give-back programs including grants or scholarships that you may be able to apply for as well. Additionally, service jobs are more likely to be able to be carried part-time through your final year of high school (and beyond!) which gives you an additional few months to make money for college.

The New Parent’s Guide to 529 Plans

Congratulations! You’re either expecting your new bundle of joy in the upcoming months, or you’ve recently had a new addition to your family. In either case, chances are you’ve thought of your child’s future and dreamt of hugging them in their cap and gown as they graduate from a top level college.

College planning often begins at birth for families, when the pressures of time and interest rates can be applied to maximize how much the family can save for a future college education. Whether you yourself went to college, or you simply recognize that you want the opportunity to be available to your child, savings started early are a significant boost.

The most common vehicle for college savings are 529 plans. Simply put, 529 plans are the federal government’s way of allowing you to save your money and allow it to grow tax-free for your child’s education, and ensuring that funds that accumulate over time are tax-free when withdrawn. Best of all, most states (including North Carolina) give you an annual tax credit which would reduce your taxes owing when you make regular contributions.

How Do We Enroll?

Simply contacting your local bank or financial advisor is likely to put you on the right path, but in North Carolina, you can also consider talking to The College Foundation of North Carolina at http://www.cfnc.org/index.jsp

Who Can Enroll?

Any relative of a child can enroll on their behalf. Often times, grandparents opt to enroll their new grandkids in 529 plans, helping the parents with long-term savings needs and also drawing their own tax benefits on retirement incomes.

What Can 529 Savings Be Used For?

529 plans are intended to be used for all college expenses, not simply tuition. The list of eligible Qualified Higher Education Expenses includes tuition, fees, books, room and board, and supplies for school.

Beware Of….

There are two things that 529 contributors should be wary of:

Fees-Often banks and financial advisors will charge a premium for managing your educational investment fund. Be sure to inquire about fees before signing with any advisor.

Penalties-If your child doesn't go to college (or, best-case scenario- he/she receives a full scholarship) you may face penalties for withdrawing money for non-educational uses from the 529 plan, including a 10% premium and having to pay taxes on the money you withdraw. However, 529 funds are transferable-if you have a niece or nephew who can benefit, you may be able to transfer the fund to them tax-free.

529 plans are a very cost-effective and simple way for parents to prepare for their child's education. The earlier you start, the better you and your child will be prepared. And on 12 or years or so, I'll forward to helping him or her with their college applications needs.

Saving for College

College is expensive. We just stumbled on a report from the The Chronicle of Higher Education, which says there are now are 100 colleges which cost more than $50,000 per year!

In an economy when foreclosures are high and money is low, how can students and parents save for college?

Save Early, Save Often

Virtually every state now offers a 529 plan, allowing parents a tax-free or tax-deferred plan to save for their child’s higher education. The plans offer parents tax-based incentives to save early and save often for their children’s college tuition and expenses. 529 plans can be set up at your local financial institution.

The key is to get started early and contribute often. It’s become quite common for parents to start a college savings plan when a child is born (16 years of savings growth!), or when they graduate into high school (still 4 years of savings growth!)

Tip: Consider asking friends and family members to give donations to the child’s college fund at birthdays, holidays, and Christmas.

Find the Right Schools…

Is your child thinking of going to Berkeley? You’d better know that the average cost for new admissions in 2010 is over $49’000 for non-residents. If that price just gave you some sticker shock, you need to consider looking at what colleges your child can afford, and narrowing down your list of admission-worthy colleges from there.  

Rather than commit yourself to a particular college “brand”, consider what program your student is interested in going into, and then find the best schools in that field. Your goal isn’t to find the best all-round college; it’s to find the best college for your kid.

If money is tight, seriously consider in-state colleges, where tuition is typically half of out-of-state schools, and local colleges where your student may be able to live at home free. While finishing his/her undergrad, your student may then be able to save for a 1-2 year post-graduate program at a higher-end school.

… and the Right Scholarships

In the A2Z College Planning Guide “Time Management for College-Bound Students” we talk about how students should carefully choose extra curricular activities, to not only match their skills and interest, but also give them opportunities for scholarships and grants.

Each college has its own criteria for scholarships, based on a need for diversity and excellence in particular programs. Students are often automatically enrolled in college-specific scholarships and grants, but have to apply separately for private and state-based scholarships and grants.

Uncovering scholarship and grant opportunities can be a full-time job. If you’re serious about sending your high school student to a top college, it’s worth the time and