1. Look at the big picture. There’s only one way to know the reality of what you’re dealing with and the best place to start is the internet. Take your list of public and private colleges and do a search on their costs for tuition, room and board. Also available online are financial aid calculators for a good idea of what you can (or cannot) expect in terms of help.
2. Cast a wide net when applying. Even if your savings balance isn’t enough to cover a high-end school, don’t let that prevent you from applying if your grades are up to par. Every college has a different amount of scholarship funding and financial aid packages. Send application materials to a variety of schools to see where the best offer might come from.
3. Don’t let the term “financial aid” confuse you. Fill out the forms even if you think your parents make too much money. As your guidance counselor for the Free Application for Federal Student Aid (FAFSA) and see how you fare. This is the best place to start because it is fairly standard no matter which schools you apply to.
4. Borrow with caution. You’ve surely heard about the shortage of credit available in today’s troubled market. There are student loans with good rates, as well as private loans for your parents if they quality. Be sure to study all of the terms before accepting, however, because the loans will likely follow you around for years to come.

What’s missing in this equation? A job. Many students work their way through college, or even take a year off before starting to pad their bank accounts. Or, you could consider attending a community college for the first year and saving money by living at home. Between loans, scholarships, financial aid, savings and good old ingenuity you can piece together a financial plan that will get you through college. Get creative and you will indeed get ahead.

Federal student loans

Federal student loans have the lowest interest rates and best repayment options. If you need to take out loans and you qualify for federal loans, this is your best choice. Just be sure to accept only the funds you need, even if you are offered much more. Parents can always help their children pay off these loans once repayment begins after graduation.

Federal parent loans

PLUS Loans (Parent Loan for Undergraduate Students) are another loan option that comes with low interest rates. If you are a parent with dependent students attending college at least part-time and you have a good credit history, you are eligible to receive a PLUS Loan. These loans are not needs-based. You can borrow up to the total cost of undergraduate education expenses, minus other financial aid already received. Unlike federal student loans, payment is not deferred until after graduation; instead, your first loan payment will be due about 60 days after the loan is disbursed. Also unlike federal student loans, PLUS Loans require an application fee.

Private loans

Both students and parents can take out private loans to cover funding gaps. Terms are basically the same for these loans, although students may be able to have their repayment deferred until after graduation. Another consideration is that students may wish to take out small loans to begin to establish a credit history. You may need to cosign for private student loans.

Other options

Parents do have some additional options for college funding, such as home equity loans. These often have rates as good as private loans.

So which type of loan should I get?

This really comes down to a personal decision. Ask yourself these questions as you are trying to decide:

- What level of debt do you feel is manageable for your child to graduate with?

- How important is it to you that your child takes responsibility for paying student loans?

- Will you and your child work out a repayment plan to repay PLUS Loans and other parent loans?

Lenders may offer deferments for up to three years for federal loans and one

The Military Officers Association of America (MOAA) is the nation’s largest and most influential association of military officers. It is an independent, nonprofit, politically nonpartisan organization.  Through MOAA’s website (www.moaa.org) you will be able to find information on the vast offerings of their services and benefits.  One such area of assistance is with college savings and funding resources.

The Vanguard 529 College Savings Plan

For starters, MOAA provides servicemembers a flexible, competitive, and tax-advantaged college savings option by partnering with The Vanguard Group to offer The Vanguard® 529 College Savings Plan.  In this plan, Vanguard will waive the $3,000 minimum investment fee, so you can get started with as little as $50.  The plan offers identical benefits as all other state-sponsored 529 plans explained earlier.  Account owners will have the same investment options available to them as well as the same tax benefits offered by 529 plans.

On November 11, 2003, President George Bush signed the Military Family Tax Relief Act of 2003 (HR 3365). Among other items, the Act provides that attendance at a U.S. military academy will be treated as a scholarship for purposes of the 10% penalty on nonqualified withdrawals from a 529 plan or Coverdell ESA. The value of the no-cost education (as determined under the U.S. military code) can be withdrawn penalty-free from a 529 plan or CESA, although the earnings portion will continue to be taxable.

Share/Save

Hope Credit

Lifetime Learning Credit

1. • For 2009 and 2010, these features fall under the provisions of the American Opportunity Tax Credit.  Please refer to these features as described in the Hope Credit section of this report.

Share/Save

Typically, such programs do not require you to show a membership card to get the rebates. Instead, you register your credit cards with them and they track the purchases you make at participating merchants using the cards. You can also earn rebates by shopping online through the company web sites. This makes the programs a painless way to earn a little extra money for college.

Affinity programs with a college savings emphasis include:

• BabyCenter
• BabyMint
• FutureTrust
• LittleGrad
• SAGE Tuition Rewards Program
• Upromise
  

Of these, Upromise has the largest retailer network, followed by BabyMint. LittleGrad has the largest online retailer network, and all programs listed are completely free to the user.

A key benefit of all of these programs is that you do not need to change your purchasing habits to earn rebates for college savings. The retailer networks associated with these programs are large enough that most families will earn some rebates without altering their spending patterns. Of course, by carefully targeting your purchases, you can maximize your rebates.

Some of the loyalty programs allow one to redeem the rebates as cash instead of investing them in a section 529 college savings plan. Some also allow one to transfer the rebates to repay student loans.

The rebates received from a loyalty program are not subject to income tax or sales tax. (Many states charge sales taxes on all gross receipts from sales, including rebates for which the retailer is reimbursed. However, the consumer already paid sales tax on the amount of the rebate when they purchased the product or service that generated the loyalty program rebate, so no additional sales tax is due when the rebate is received.)

We do not recommend spending more money just to earn a rebate. If two products provide equivalent value, but the more expensive item offers a rebate, sometimes it is better to buy the less expensive item. Compare net prices after subtracting the amount of the rebate. The average rebate is between 4% and 5%.

Share/Save