Archives for posts with tag: College Savings

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College is important. By completing a degree, you are planning your future career and ensuring that you have a job that will help you support yourself and your family. However, financing a college education is not easy. Most students have to take on extensive college loans to help them through college and they find it extremely difficult to make ends meet. As a parent, what can you do to ensure that your children can afford college? How can you save enough money to ensure that your child is not left holding a ton of student loans?

Saving For College IS Easy and Affordable

You can save for your child’s education by setting up college 529 Plans. A college 529 Plan is designed to help students and families plan for their education through a special tax-deductible program. These programs are applicable on almost any college and university and you can apply to any university with this kind of saving plan. At present, there are two types of plans available: savings and prepaid.

1. Savings plans are like 401K plans. Other features of a savings 529 plan are as follows-
a. There is no lock on college costs
b. All expenses included tuition, room and board, books, computer, mandatory fees, etc. are covered in this savings plan
c. Some plans have contribution limits but the limits are usually more than $200,000.
d. With this kind of plan, you choose the investment option and the value of your savings increases or decreases based on the option. Your investment is also subject to market risk. You can evaluate the value of your investment by checking the 529-plan quarterly performance.
e. There is no age limit, no residency requirement, and enrollment is possible all through the year.

2. Prepaid plans are also available and this plan allows you to pre-pay or pay all the costs of an in-state college education.
a. These plans have a limited enrollment period.
b. You can lock the tuition rates at selected public and private colleges and universities.
c. Only a few limited options are covered under this plan but some plans cover almost everything.
d. State plans are offered and they are guaranteed by the state at a set value. You may have to be a state resident to be eligible for this plan.

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Going to college can be a confusing time for many people who attend, and there are so many things to think about. Unless you have your education paid for by a well-to-do parent or other, you will find yourself funding school through a combination of grants, loans, and possibly scholarships. This financial aid comes from a variety of sources, and usually your college will do several things with the money when it comes in (such as paying your tuition, books, and supplies). When these items are paid for, you will be given the excess in many cases.

Financial Aid Disbursements

When your excess money is disbursed to you, you have a legal responsibility to use this money for school-related purposes only. Financial aid is not to be used for any items not directly part of school. The range of purposes are broad however, and you will find many things you need for school are included. Many people will use the excess money they receive from financial aid for reasons that help them the most for college, setting priorities first.

Items You can Use Your College Financial Aid For

Items that make the list of college expenses include housing (on or off campus, it doesn’t matter which) and room and board situations. You can also spend this money on transportation expenses to get back and forth to class, and new computer equipment and periphery such as software or equipment for computers. Equipment of all kinds that you would use in and for school are also approved. Obviously, a new computer game system or paying for dates is not part of what the excess money is intended for.

Your college expenses really only have to be for something related to school in some way, so it could be almost anything that you would use for school. In some cases, you can use the excess monies to study abroad and the college expenses incurred from doing so. If you have questions about a particular item, just ask your school and they will help you determine if it’s approved or not.

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