Tuesday, October 14, 2014

Thrifty Thinking: College Tuition Tips

GoEnnounce is an educational achievement and fundraising social platform. To give you some long-term practical advice on soaring tuition costs, college saving expert, Melissa Davis, Co-founder of GoEnnounce has some quick tips:

5 TIPS – #HowToPayMyTuition:

1. Depending on the state and type of account there are tax benefits to parents and contributors of specific types of college savings accounts such as 529 plans.  Upromise, the college savings rewards service offered by Sallie Mae offers lots of great options.

2. Check out what’s available in your state and your college savings benefits as a resident. For example, Florida offers Florida Prepaid, which allows parents to set up plans to prepay and lock in Florida state college and university tuition rates at the time the account is created.

3. Whether it’s an official education based savings account, or personal, it’s less expensive to save for college than borrow.

Set aside chunks of paychecks monthly. Whether it’s in advance or at the time your student is in school, you're setting aside a portion of your income to pay for college.

When you save, the money earns interest, but when you borrow you're paying the interest. Paying for college before your child matriculates definitely costs much less than paying for college afterward.

Saving $200 a month for ten years at 7% interest would yield $34,818.89. Borrowing the same amount at 6.8% interest with a ten-year term would require payments of $400.70 a month.

4. Start the scholarship process early with your children. Students don’t have to wait until their senior year to win all scholarships.  For example GoEnnounce offers a monthly scholarship, students can be awarded as early as their freshman of H.S.

5. When thinking about Financial Aid understand how you and your child’s assets and income count towards EFC (Expected Family Contribution).  To see how EFC is determined click here. It’s important to remember the types of savings accounts you set up for your child can affect the EFC at the time you apply your students applies for Financial Aid.

No comments:

Post a Comment