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Last week, several members of the Private College 529 Plan board presented a session on 529 plans at the College Board Forum. Our data showed that colleges expect middle and upper income families to save for college, but they are not. We suggested that it is in the best interests of colleges and universities to find ways to promote savings in 529 plans. To distribute the information more widely, I've written a blog post for the Brookings Institution's Brown Center Chalkboard blog.
If you read anything about paying for college these days, you may have seen a column or two in which the author lamented that “back in the day” a student could earn the year’s tuition by working a summer job.
Of course, those times are past. Given the rising cost of college, higher education has to be paid for over time, like retirement or a home. There are basically two options:
Save money in advance and earn interest, especially in tax-advantaged 529 plans
The huge drop in the stock market in late August is a reason for families saving for college to explore the Private College 529 Plan. So says a leading college savings advisor writing on the Forbes.com web site. Troy Onink, is CEO of college planning firm, Stratagee.com.
Troy writes, and I couldn't agree more:
If you are planning to open a Private College 529 account before tuition rates go up, you actually have a little more time than you might expect. You see, one second will be added to June 30 to synchronize atomic clocks with Earth’s rotation. It’s a phenomenon, known as “leap second,” which happens every few years.
May 29 is “529 College Savings Day.” As president of a 529 prepaid tuition plan, this is a time to remember that planning and saving for college is more advantageous than borrowing. To cite one example, to pay $10,000 of college costs, a family could save $58 a month for 10 years at 7% interest. That’s $7,000 in principal and $3,000 coming in earnings.
I saw Daymond John’s keynote presentation at the recent conference held by the National Association of Personal Financial Advisors (NAPFA) in San Diego. His advice can make a difference in so many ways, and I even apply it to planning for college.
Recent growth in membership of Private College 529 Plan is an important reason for financial advisors to encourage their clients to explore the use of this non-traditional, prepaid investment vehicle, according to a recent article in Investment News magazine, a publication widely read by the nation’s financial advisors.
This is the time of the year when many students choose which of the colleges that accepted them to attend. It is a major decision that for many will clearly be shaping their future. How well will their college have prepared them for the challenges of life, including their economic well-being, health, family, civil engagement, and achieving their dreams.