College Affordability Center

1 01 2014

It is officially 2014 and many folks are gearing up to tackle some New Year’s resolutions!  For many, resolutions include eating healthy, paying off debt, saving for their kid(s)’ college.

For those parents with goals of saving for their child’s for higher education costs, the Department of Education provides valuable insight on tuition rates across the Nation.

Since I ran some numbers myself, I thought I’d share with my clients a math equation to reflect the same.

  • Child: Age 1
  • Tuition: $35,000 (estimated)
  • Time to Save: 16 years
  • Savings Total: $600
  • Amount Needed to be Saved to Achieve Goal: $158 monthly

Of course inflation is not factored into the equation, however I believe this math provides a peak into what parents will need to save to achieve their tuition goal.  Also, student financial aid and scholarships will help cut some costs for many prospective students.

Follow more of my articles regarding Education Costs/Kids and Money.

How America is Saving for College 2013

6 10 2013

Source: College Answer

Sallie Mae’s “How America Saves for College 2013” study, conducted by Ipsos, finds that despite rising college costs, fewer American families with children under age 18 save for college (50%) than did just two years ago (60%). Based on a nationally representative survey of parents of children under age 18, the study found that:

  • While nearly all parents believe college is an investment in their child’s future, only one-third have a plan to pay for college.
  • When asked to describe their feelings about saving for college, parents’ top answers were overwhelmed, annoyed, frustrated, scared, or that they don’t like thinking about it at all.
  • Among those not saving, 47 percent cite a barrier other than money. Top reasons included thinking that children would be awarded enough financial aid to cover the cost of college, children are too young or too old, uncertainty about which savings option to use, procrastination and feeling it is the child’s responsibility to save and pay for college.
  • Starting to save is most frequently prompted by major milestones such as a child’s birth (34%), starting school (24%), or learning about college costs from friends and family (20%).
  • Slightly more than one quarter (27%) of parents who are saving for college use a 529 college savings plan. However, more parents save for college using general funds or CDs (42%) and may miss out on tax incentives offered by a 529 account.


Education Loan Forms (forbearance etc)

7 09 2012

A great resource for Student Loan Forms found here.

Does my Child’s Retirement Account affect their Ability to obtain Financial Aid?

22 03 2012

Parents nation-wide are worried about their child’s eligibility for college financial aid.  This is especially true for those parents with children whom have a small retirement nest egg from earned income.

The facts – retirement accounts (such as Roth IRAs, 401ks) are not reported to the Financial Aid board (FAFSA) if distributions (a/k/a withdrawals) are not being made.  Once assets are withdrawn, they are considered “income” and will be factored into the FAFSA application.  Besides, it doesn’t make ‘financial sense’ to withdraw funds from retirement accounts prior to retirement age – you will end up paying early withdrawal penalties and taxes on money withdrawn.  The best advice is to withdraw funds during retirement age in intervals.

A great article about the topic is found here.

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