529 Savings Plan
In the last few years a growing number of families have taken advantage of qualified tuition programs, commonly known as 529 plans. 529 plans come in two options: college savings plans and prepaid tuition plans. College savings plans allow individuals to contribute to an account established to pay a student's higher education expenses at any eligible educational institution. Prepaid tuition plans are set up to allow an individual to prepay a student's future tuition and fees at today's rates. Prepaid plans are offered in 17 states.
Checklist for Selecting a 529 Plan
Is the plan available to residents in my state?
Who may open the account?
At which colleges and universities may withdrawls be used?
Do I have to name a specific school when buying a prepaid tuition plan?
Are prepaid tuition benefits guaranteed by the state?
What expenses are covered by plan withdrawls?
What is the plan's refund policy?
What fees are associated with my account?
What investment options are offered by the plan?
What if my child does not pursue a postsecondary education?
College-Aid Application Mistakes To Avoid
Starting in the fall, high school students and their parents are frantically applying for financial aid for college. While it is important to meet the application deadlines, it is just as important to carefully fill out the forms.
Here are the biggest mistakes commonly made when seeking financial aid for college-bound children.
1).
Rushing through the application process. One of the main reasons that students are turned down for financial aid is not because their parents make too much money, but because they rushed through the aid-application process and made errors.
Take your time. It's better to submit a complete application the day that it is due than to hastily complete the forms and make mistakes when trying to be one of the first to submit them.
Tip: Send all your financial aid applications and correspondence by certified mail. If it is lost, at least you'll have a postmarked receipt. It is better to be safe than sorry.
2). Underestimating your financial aid eligibility. Don't assume that you make too much money to qualify for financial aid. Always apply. Sometimes families with incomes in excess of $150,000 receive financial aid.
3). Waiting until your child's senior year of high school to think about financial aid for college. Start thinking about financial aid eligibility when your child in in 10th or 11th grade. Try to determine how your income, assets, debts, expenses and retirement provisions will affect your eligibility.