We talked a few weeks ago about how the stock market crash is going to affect college savings plans.  I mentioned that those of you with plans to attend school in the next year might be feeling a real pinch.

Before you completely panic, I decided to take a look at what the experts are saying about 529 Plans - both for those of you who are in school, or about to start, and for those parents who are wondering whether they should still invest for their children's future.

Quick Reminder: What is a 529 Plan?

There are two different kinds of 529 Plans: college savings plans and prepaid tuition plans. Prepaid plans let you buy tuition credits at today's prices and guarantee them for the future. In today's market, this might seem like a safer bet, but keep in mind that prepaid plans limit a student's options in terms of what school they will attend.

A college savings plan is a managed investment portfolio, where your money is invested in some savings vehicle, usually mutual funds of stocks or bonds. The risk is greater than with a prepaid plan, since you are not guaranteed a rate of return (in this case, X number of tuition credits).  But, if your college savings plan does well, you can earn a lot more in interest than with the prepaid plan.

In addition to the benefit of saving for college, both types of 529 Plans offer added tax incentives.  The money saved in a 529 Plan earns interest tax-free; and when the funds are used for an approved education expense (this is generally broadly defined), the withdrawal is also tax free.

How has the stock market crash affected college savings plans?
According to this article, 529 Plans have declined in value 9 percent since last quarter - even taking into account new investments. And that was before the bottom fell out of Wall Street.

It stands to reason, though, that aggressively invested 529 Plans will be seeing similar losses to the rest of the Dow Jones.  Since its record high one year ago on October 9, the Dow Jones has lost over 40 percent of its value.

Keep in mind, however, that most 529 Plans are set to become increasingly conservative as your child gets closer and closer to college age. Which means, if you child is about to start school next fall, your plan may have already converted to a majority bond position - and therefore have been spared most of the axe.  Definitely check your plan's quarterly statement, if you haven't already.

For those of you with more aggressive funds, the precipitous drop has undoubtedly cut your earnings (and likely your principle) dramatically.  The good news, though, is that (1) you still probably have time to recover and (2) your tax savings are still accruing.

What if I had a 100% Equity Plan and my child is about to start school?
Well, then, unfortunately, you are probably feeling substantial pain since your plan is not worth as much as you had counted on.  Your family may have to take out more college student loans that you planned - or make alternative arrangements (like considering a less expensive state school, or two-year community college).  Many parents of incoming freshmen are opting to leave their funds untouched for the next year or two, hoping the fund will bounce back in time for junior and senior year.  In the meantime, they are taking out loans or using other means to cover the costs of tuition, room and board.

Is a 529 Plan still a good investment for me and my child?
It absolutely is, according to Bankrate.com, which dispenses the following advice in this recent article on cnbc.com:

For parents of 0-10 year olds

• Avoid the urge to flee, stay the course, you have plenty of time to recoup any losses

• Be sure to chose a plan with an age-based option, though, so that as your child gets closer to college age, the risk factor will decrease

For parents of 11-16 year olds

• Depending on your risk tolerance, you may actually want to switch away from your age-based option to a more aggressive, all-stocks option.

• Sticking with an age-based investment option locks in your current losses when the plan shifts from stocks to bonds.

So, how has the current market situation affected your college savings?

Can you believe it's Thursday already?  What's on your To Do list this weekend?  Filling out a few scholarship applications, I hope. 

Today, I've got three money-makers that you should check out. All three of these scholarship opportunities have upcoming deadlines - two are the first of November and one is the 14th - so you'll definitely want to get started on these right away.

# 1.Joe Fossi Veteran's Day Scholarship Contest: $5,000
Is your college budget about $5,000 short?  Here's a great opportunity for you to win that 5 grand, plus another $500 for your school. Submit an original essay of at least 1,5000 words on the topic, "Veteran's Day: How I intend to Observe This Day."  The contest is open to junior and senior high school students currently studying in the United States (homeschoolers are welcome to apply as well).  Entries must be postmarked or emailed no later than November 14.  The final winner will be determined and announced by December 14. You hear about unusual scholarships, well this is one of those!

#2. Ron Brown Scholar Program: $40,000 (over four years)
The Ron Brown Scholars Program offers a minimum of ten African-American high school seniors an annual scholarship of $10,000, for a total of $40,000.  Scholars must excel academically, exhibit exceptional leadership potential, participate in community service activities and demonstrate financial need. Only high school seniors are eligible to apply. Scholars may apply their scholarship to pursue any academic discipline. Applications are screened in February and finalists are invited to participate in a weekend selection process in Washington, D.C. in March. During the all-expense paid trip, finalists are interviewed by members of the Ron Brown Selection Committee.

Application materials include transcripts and letters of recommendation, application form and essay.  It should all be mailed together (email and faxes are not accepted). There are two deadlines for the Ron Brown Scholars program: You can apply by January 9th, or you can apply by November 1st, in which case not only with the Ron Brown Committee consider your application, but they will also forward it to a select number of additional scholarship providers. For more information, visit the Scholars site at www.ronbrown.org.

#3. Tim Moore Design Scholarship: $500 - $1,500
Tim Moore was a painter, graphic designer and musician, who saw travel as an essential part of the creative experience. He died suddenly at the age of 54 and now the AIGA Boston is sponsoring a scholarship in his honor.  To qualify, you must be a junior or senior design student, who is planning to study design abroad.  Scholarship recipients must be willing to keep a sketchbook of their adventure abroad and submit it to the Board of Directors of AIGA Boston, which may be used in fundraising materials at a future date. The Discovery Award is $500 for students studying 1-3 weeks abroad; the Explorer Award is a $1,000 grant for a 4-6 week study period; and the Pioneer Award provides $1,500 to students studying abroad for 7 weeks or longer.  The application form can be downloaded online. Application Deadline: November 1st.

Good luck with your apps! And please stop by and let us know if when you win one!

Due to some technical difficulties, our weekly scholarships post is making its appearance on Friday this week instead of Thursday. 

Fortunately both of the great opportunities I've got today have end of the month deadlines - so you've still got plenty of time to get working on your applications.

#1. Annie's Homegrown Sustainable Agriculture Scholarship

Here's a scholarship opportunity you don't hear about every day.  But if you are a farmer and an organic fanatic, this one might be right up your alley. Annie's Homegrown is an organic commercial food company, best known for their eye-catching purple boxes of mac-n-cheese. This year, Annie's is adding to its good deeds with $50,000 in scholarships for students of sustainable organic agriculture.  You can find the nomination form and application information online.  Both full-time undergraduate students (in either a two-year or a four-year program) and graduate students are eligible to apply.  For the 2007-2008 school year, the company awarded eight $2,500 scholarships and three $10,000 scholarships.  The application deadline is October 30th.  Final decisions will be announced by March 3, 2009 and funds will be dispersed for the 2009-2010 school year on June 15, 2009.

#2. The Prudential Spirit of Community Awards

Since 1995, Prudential Financial has been honoring young people in middle school and high school grades for outstanding volunteer service to their communities. Together with the National Association of Secondary School Principals (NASSP), Prudential Financial has honored more than 80,000 young volunteers over the last 13 years.  Each year, two honorees are designated for each state, plus the District of Columbia.  Honorees win a $1,000 college scholarship plus an all-expenses paid trip to the nation's capital for a special award dinner.  To apply online, visit the 2009 Prudential Spirit of Community Awards. The application deadline is October 31, 2008.

October 13, 2008 by Mara Strom

When I was a senior in college, about to graduate with a degree in political science, I seriously considered going to law school. 

It seemed like everyone I knew was doing it, and really, what else was I going to do?  Law school had become (and remains for many American college students) the next-step in an undefined career of liberal arts academia.

(I'm not knocking liberal arts schools in anyway.  I am a proud graduate of a school with a strong liberal arts grounding.  I'm just saying that a lot of us didn't/don't know what we're going to do with our lives when we graduate - and that the percentage of uncertainty seems greater than at professional/applied schools.)

So, what stopped me from sitting for the LSATs?  Aside from a profound dislike of standardized tests, it was my realization that I couldn't go to law school without incurring massive student loan debt. And I knew, even back then, when I was much more naïve about the way that debt can run (ruin) your life, that the only way to pay off that kind of debt would be to go into corporate law.  And I knew, again - even back then, that that was not what I wanted to do.

Of course, I realize that not everyone is going to rule out a legal career due to their fear of standardized tests and Sallie Mae.  And I also know that there are plenty of happy corporate lawyers (presumably at least).

So, if law school is in your future, then you will probably want to pick up the most recent National Jurist.  This magazine for law students compiled a list of the 50 most generous law schools in terms of their financial aid awards.  The ranking specifically looks at how much each school hands out in terms of government student grants and scholarships (but not student loans) as percentage of tuition.

It's interesting to note that not one of America's top private law schools, including Harvard, Yale, Stanford or the University of Chicago, made this list - most likely because their hefty tuition far outweighed any aid package offered.

The highest ranked law school to make the National Jurist's Top 50 list was the University of Virginia School of Law, which scored a ratio of 23.2 percent. UVA was ranked the 9th best public law school in the 2009 US News and World Report college ranking edition.

Here's a look at top 25 schools on the National Jurist list, according to the TaxProf blog:

1. Thomas Cooley: 93.9%
2. Toledo:  61.4%
3. Liberty: 51.2%
4. Northern Kentucky: 50.4%
5. La Verne:  49.0%
6. St. Thomas:  43.6%
7. Akron:  43.2%
8. Connecticut: 41.2%
9. Howard: 41.3%
10. Hamline: 39.3%
11. Whittier: 36.0%
12. SMU: 35.8%
13. Western new England: 35.1%
14. Ohio Northern: 34.3%
15. Alabama: 34.2%
16. Iowa: 34.1%
17. Nebraska: 33.2%
18. Indiana-Bloomington: 32.6%
19. Wake Forest: 32.3%
20. LSU: 31.9%
21. Tennessee: 31.7%
22. Ave Maria: 31.2%
23. Arizona: 31.0%
24. UDC: 31.0%
25. Capital: 30.8%

Here's a few more things about student loans and law school you may want to keep in mind:

* Nellie Mae says that the average professional student (i.e. law and medical student) graduates with $48,500 in debt.  But almost everything I have read suggests that the real number is much higher - double it for law school and triple it for med school.  Even the University of Iowa, which is a public school (i.e. it has relatively lower tuition costs) says that its average law school graduate carries more than $76,000 in loans.

* Financial aid awards for law school and other professional graduate schools, including business, medicine and dentistry, are historically (and notoriously) low, even for students with a high degree of financial need. Why?  Because schools know that lawyers, CEOs, doctors and dentists make, as a whole, a lot of money.  Certainly enough to be able to "afford" sky-high student loan payments. (The average first-year salary for an attorney is nearly $58,000 per year.)

* And so, universities direct their limited financial aid funds to programs and schools serving students who don't have that same earning potential.  At least that is my unofficial understanding of why there is typically so little scholarship and grant assistance available to law school students.

* By the way, lawyers graduating from a top 10 school like Harvard or Stanford command even higher salaries than the average, making those schools an even less likely source of generous financial aid awards. (The average starting salary for a Harvard law school grad is just shy of $127,000/year, more than twice that of the national average.)

* All of this means, then, that if you want to consider a career in law - and don't want to be straddled with 100k in student loan for the duration of that career, then you might want to take a long-hard look at some of the schools on the National Jurist's list.

(On a separate note, I know I said that I'd be writing a post this week about how the market crash is affecting college savings plans.  It's coming, I promise. Just maybe not this week!)

Can you believe it's already Thursday again? For many of you, this is the start of a long holiday weekend.

If you've got Monday off for Columbus Day, why not dedicate a few hours to completing some college scholarship applications?  Here are two great opportunities:

1. The Coca-Cola Scholars Foundation

Back in August, I told you about this phenomenal scholarship opportunity. The Coca-Cola Scholars Foundation provides $3.4 million in annual scholarships through its two nationally recognized programs: the four-year award and the two-year award. October 31st is the deadline for Coca-Cola four-year award program, which provides 50 high school seniors with a four-year $20,000  scholarship (that's $20K/year for for years!), and it gives another 200 high school seniors a four-year $10,000 scholarship. Scholarships are intended to reward leadership and excellence, with a focus on academic achievement, extracurricular activities and community service. As you can imagine, these scholarships are uber-competitive, so you will want to be sure that your application is perfect. Apply on-line at the Coca Cola Scholars Foundation. (Coca-Cola also offers a scholarship program for students in two-year programs, which you may recall me posting about back in May.)

2. Golden Key International Honor Society General Electric Engineering Excellence Scholarship

Are you an engineering student? Are you a member of the Golden Key International Honor Society?  If so, you may be eligible to win a $1,000 scholarship. To apply, start by registering your scholarship application, then polish up your best engineering related paper or report, not in excess of 10 pages of text. Next, write a 500-word essay describing the assignment for writing the paper, your greatest challenge in writing the paper, the lessons your learned from completing the assignment, and, if you could rewrite the report, what would have done differently.  Your application will also need a letter of recommendation from a professor of engineering and a current academic transcript.  Application deadline: October 15.

October 6, 2008 by Mara Strom

You can't turn on the TV these days without being bombarded by financial doom and gloom.  If you are a college student (or planning to be one in the near future), there is no doubt that current economic climate is going to have some kind of an impact on your student financial aid package. 

Over the next few weeks, we'll be looking at the cost of attending college during an economic downturn, with stories on how to recession-proof your college savings and how the market cash will impact your 529 Plan.

This week, I'm putting the spotlight on how the recession may impact your student loans. The University Chronicle recently reported on how that the current credit market crunch is affecting education lenders. According to this October 2nd article, the loans that will be affected by the market crash are private student loans.  Experts say that federal loans will continue to be secure.

Most current private loans feature a fixed rate (albeit higher than the rate on federal loans), so the recession should not affect your existing loan.  If you need to take out a private loan in the future, however, expect to see higher interest rates - and stricter terms of approval.

Private loans are being affected by the market differently because lenders also have to worry about student loan defaults. That's probably going to sound like bad news to the majority of you.  According to a recent Seattle Times article, more than 2/3rds of college students borrow money to get through school.  That's up from less than half just a decade ago.  As unemployment figures go up, student loan borrowers will likely increase as well - since parental contributions may be drying up.

The good news is that many colleges, especially expensive private schools (where the average annual cost of tuition alone is $23,000), are digging deeper into their coffers to help students need.  According to this recent story on NPR, the key to getting more aid is being willing to ask for it.

Are you finding that the credit crunch is affecting your college budget?  What creative solutions have you taken to cover yourself for this semester?

It may be late in the day, but it's still Thursday and I've got two really great scholarship opportunities. 

So make some time in your busy weekend schedule to write some essays and fill out some applications.

1. Horatio Alger Association Scholarships: $20,000
The Horatio Alger National Scholarship is one of the nation's largest scholarships program, annually awarding 105 high school seniors with a $20,000 scholarship.  The scholarship committee is looking for candidates who will use their college degree to serve others.  Ideal candidates will also have demonstrated integrity, perseverance in overcoming adversity, and strength of character.  Candidates must have at least a 2.0 GPA and critical financial need (family adjusted gross income of $50,000 or less).  In addition to their scholarship, national scholars also receive an all expenses paid trip to Washington D.C. during their senior year to attend the National Scholars Conference. Go here to apply on line. The application deadline for the Horatio Alger Association Scholarship is October 30.

2. Akademos / TextbookX.com 2008 Scholarship: $2,000
TextbookX.com is a discount online bookstore, offering up to 90% off retail prices on more than 900,000 titles. Founded by Akademos, TextbookX.com is running its second annual scholarship essay contest.  To win the grand prize of a $2,000 scholarship (or two runners-up prizes of $250 in book credits), current undergraduate students must answer the following question: What should be done, if anything, to stop nuclear proliferation? Your essay must be no fewer than 250 words and may not exceed 750 words.  All content must be original and must demonstrate a strong grasp of grammar rules. The essay must also reference at least one book that influenced the student's answer and provide complete bibliographical information. All essays must be submitted on the TextbookX.com website by October 31, 2008 at 11:59 PM EST.

Good luck with your scholarship essays!  See you on Monday.