Last month, we talked about how to figure out how much you need to save for your child’s (or your own) college education. The bottom line was that there is no set formula. Rather, the amount you put away is a factor of how much you can afford, what college (or type of college) you anticipate your child attending, and how much other assistance you expect to receive. I promised you at the time that I’d write a series of posts looking at the pros and cons of the different college savings vehicles. Well, it has taken me a while to get back to the topic, but I haven’t forgotten! Today I’m starting a series on the plusses and minuses of the various tax-advantaged plans. The most popular of these saving schemes are the 529 College Savings Plans and the 529 Prepaid Tuitio...

Conventional wisdom tells us that it’s never too late to start saving. But is that necessarily true when it comes to college costs? If you are a parent, how much do you need to save in order to pay (or even help to pay) for your child’s undergraduate education? Let’s say you are have a newborn baby. If you start putting away $100 a month for the wee one right now, by the time he or she is ready to start in on the freshman fifteen, you will have over $60,000 in the bank (assuming a 10% rate of return).  That sounds like a pretty big pot for a relatively small investment (just $100 a month). But is it enough? The answer to that question is: It depends. It depends on where you child attends school. The average total cost for tuition, room, board, and books at a four-yea...

If you are a parent who has diligently socked away funds in a 529 Plan for your children’s college education, you have probably lost a bundle in the last year.  Seeing your kids’ nest egg dip down is scary, no doubt about it. When the panic starts to set in, some of you are probably thinking about calling it quits on your college savings. Before you pull the plug, here are some tips for recouping your losses and keeping the college plans afloat. 1. Do the interest rate math. If your child is still in preschool, you really don’t have anything to worry about. With an average of 10 percent returns, your fund will double in value in 10 years. But even if you don’t have 10 years, you can probably recoup your losses within six years. So even if your child is 12 or 13...

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 pre...

August 25, 2008 by Mara Strom It’s a conundrum. When you graduate from college, you’ll want to have a good credit score. Everyone from mortgage banks to potential employers will be checking your credit report to see if you are a credit worthy individual. And if you have never had a credit card (or some kind of secured debt, such as a mortgage or car loan), then your credit worthiness will not be rated very high. How can that be? — you might be wondering. You chose not to take out a credit card because you wanted to be responsible: To *avoid* the trap of consumer debt. Well, unfortunately for you, the credit reporting agencies use your credit card history to calculate your credit score. Also known as a FICO score, your credit score is configured using a mathematical fo...

August 20, 2008 by Mara Strom Welcome to part three of our series on living on a budget at college. (If you haven’t already read them, check out the previous posts: Eating on a Budget and Textbooks on a Budget.) Let me start by apologizing for not getting this post up on Monday. I just moved this weekend and despite Major-Internet-Provider’s most fervent promises that I’d be on-line Monday, that obviously did not come to pass. Anyway, the move has given me a great opportunity to reflect on all the millions and millions of little expenses that seem to crop up when you move to a new place. From light bulbs to toilet bowl brushes, Target has done a brisk business from me the past few days. Come the start of school, you, too, will likely encounter the bottomless money pit tha...

August 4, 2008 by Mara Strom With the first day of college right around the corner, it’s time to start thinking about all those beginning of semester start-up costs. Are you trying to stretch your scholarship dollars? Or make your work-study money go as far as possible? Over the next few Mondays at the Financial Aid Finder, I’m going to focus on some frugal(ish) ways to save money and reduce your overall expenses. This week, we’re talking about textbooks. Books are often one of those unplanned — or under-planned — for expenses that can really bust your budget. The cost of books has gone up more than 180 percent in the last decade and it’s not unusual for students to blow $1,000 or more on buying them. Given that textbooks are unavoidable (assuming you...

Top 4 Military Aid Programs for the College-Bound July 28, 2008 by Mara Strom With the cost of college skyrocketing (the national rate of inflation on tuition is 7.2% a year — and rising), many students are looking for creative ways to pay for school. Did you know that enlisting in the US Armed Forces, Coast Guard or the National Guard could you help you fully fund your undergraduate — or graduate — education? There are a number of education benefits available to those serving in the US Armed Forces and their family members as well as to veterans. Here are the Top 5 financial aid programs you should know about. 1) Military Tuition Assistance Tuition Assistance (TA) is a federally funded education benefit for members of the US Armed Forces. TA can be used to fund up to 10...

July 20, 2008 by Mara Strom Wisebread had an interesting post yesterday about students whose families’ middle class income status has squeezed them out of the golden Medina of federal and state financial assistance: Financial Need. Blogger Xin Lu cites two college friends whose families were well off enough to be denied financial assistance to their top picks — Harvard and MIT. When their families decided the Ivy League was out of their league, the friends went to their second choice: public in-state schools, where they presumably managed to graduate debt-free. There’s a wealth of food for thought in this post — and especially in the comments section. For me, one of the most salient issues comes down to the following question: What is the true value of a college e...

July 7, 2008 by Mara Strom Most of the time I come here and talk about what you should do to get financial aid…Gentle reminders about filing before the FAFSA deadline, applying for as many scholarships as you can, and picking the right student loan to cover the gap. Well, today, I’m going to be a little more ruthless. I’m going to tell you what NOT to do — under any circumstances — if you want financial aid. Don’t let one of these goofs gut your chances for the education you want and deserve. 1. Not Applying for Financial Aid This made sound too obvious to be true, but many students and their families assume they won’t qualify for financial aid so they don’t even bother applying. They think they make too much money — but even families makin...