A recent article from the Dallas News alerted me to a problem with the Prepaid Tuition 529 Plan in Texas. Originally, the plan let investors withdraw their funds, plus earnings, even if the designated beneficiary wasn’t going to college in Texas. Now, however, the state of Texas is amending that benefit: If investors don’t use their plan to pay for school in Texas, they get only the value of their original investment, without any of the interest. What gives? Apparently, the longhorn plan is running in the red, to the tune of almost $2 billion by 2030. The Texas Legislature deregulated tuition rates in 2003, and that’s when tuition started to skyrocket — much faster than the fund could keep up with. Anticipating this problem, the pre-paid tuition fund was closed...

Welcome to the part 5 of my series on ways to reduce the cost of college.  It’s been a while since we have had an update, so this one is quite overdue, I’m afraid. Just to remind you, so far, I’ve spotlighted four suggestions: 1. Graduate from college in three years rather than four 2. Go to a local community college for up to two years before transferring to a four-year university 3. Volunteer for AmeriCorps and earn nearly $5,000 toward college 4. Take advantage of education tax credits and deductions to save up to $2,000 per year. Today I am focusing on a super easy way to save some money for college — by buying the food and other consumable goods your family already purchases. The program is called Upromise, and it was launched a decade ago. Today, there are ...

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...

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...

It’s never too late to save for your children’s education. Even if your child is a teenager, save as much money as you can until they are ready to attend college. One way to save is with a 529 college savings plan. A 529 college savings plan is an investment plan that puts money aside for higher education, and can offset the amount needed in the form of college student loans. 529 plans offer a tax advantage to parents and other relatives that want to help a child go to college. All fifty states and the District of Columbia have their own 529 plan. To find out the requirements for the savings plan in your state, visit their website. There are two types of 529 plans. Pre-paid tuition plans let parents purchase tuition credits based on what the going rate is today and the plan...