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The process of projecting future costs of higher education and identifying strategies to achieve savings goals.
Saving for College
529 Plan – Educational savings plan designed to help families set aside money for college. Benefits include:
UTMA/UGMA – An irrevocable savings plan that allows minors to own securities by way of a trust without the need of attorney’s and trust documents. Benefits include:
Other Ways to Pay for College and Reduce Costs
Loans – close to two-thirds of undergraduate students use loans to pay for college. There are three different types of loans: Student, Parent and Private:
Scholarships – unlike loans, scholarships do not need to be repaid and generally awarded to students with special qualifications. Hundreds of thousands are rewarded each year (FastWeb is a good site to search for different scholarships)
Military Aid – students either interested in enlisting or who have previously enlisted in the military may be eligible for aid that may cover up to three-fifths of the average cost of college
Work-Study Jobs - are federally funded programs that provide part-time jobs for college students with financial need. You will need to complete a FAFSA each year to see if your student qualifies. Even if you don't qualify, there are plenty of off-campus jobs that can provide income, work experience, and professional connections.
In addition to saving for college, strategies and planning involving the FAFSA (Free Application for Federal Student Aid) are important to maximize the amount of federal aid you receive and therefore reducing the amount you pay.
Be selective with the college and major. While passion and student interest are critical factors, if your student is favoring a lower "return on investment" major, consider starting at a local or community college, which can be less expensive. Then transfer to a more prestigious or larger school to receive the degree.
Get Credit Early and Graduate on Time!
Consider the investment objectives, risks, charges and expenses before investing in a 529 College Savings Plan. Investments in a 529 plan are neither insured nor guaranteed and there is the risk of investment loss. You should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits such as financial aid, scholarship funds or protection from creditors that are only available if you invest in that state’s 529 plan.