Money Savvy » College Funding

Education savings motivate children to excel

Jennifer — Fri, 19 Oct 2007 01:49:44 +0000

(NC)-It is no surprise that putting money aside for a child’s post-secondary education helps prepare parents for the rising cost of tuition and related expenses. But parents will be pleased to learn that investing in their child’s education at an early age is also a motivator for them to excel.

John Kearns, president and CEO of Canadian Scholarship Trust Foundation (C.S.T.) – Canada’s oldest and largest provider of Registered Education Savings Plans (RESP) – says that several C.S.T. Plan beneficiaries have testified to the fact that having an RESP encouraged them to excel.

“I knew I always wanted to go, but knowing that it was in my account, and that my parents worked hard to keep up the account, made me want to try harder in school to become something in life,” said Nadia Achaa Kyerematen, beneficiary of a Canadian Scholarship Trust RESP.

According to Statistics Canada, young Canadians who had savings put aside for their post-secondary education by themselves, their parents or others were more likely to take some post-secondary education (74 per cent compared with 50 per cent). This dramatic difference highlights the importance of putting aside money and how parents’ attitudes toward saving for college, university or trade school have a big impact on whether a child pursues higher education.

By starting an RESP early in their child’s life, parents clearly communicate expectations for their child’s future success. An RESP is an education savings plan registered under the Federal Income Tax Act that helps families save for post-secondary education. Income earned on contributions grows tax-free until a child is ready to attend college, university or even trade school. The federal government will also match 20 per cent of your RESP contributions through the Canada Education Savings Grant program – this can add up to $500 per year per child or $7,200 over the life of the plan.

Thealia Elsie Braid Black attributes her aspiration for higher learning to her Canadian Scholarship Trust RESP. “If I didn’t have this money, I would have taken a year or two more to work, and might have ended up not going to college at all.”

More information is available online at www.educateyourchildren.ca or toll-free at 1-877-333-7377.

Credit: www.newscanada.com

Simple Tips for Funding Your College Education

Jennifer — Thu, 20 Sep 2007 20:58:31 +0000

In today’s job market, very few dispute the importance and benefits of higher education. The record numbers of students enrolling in colleges and universities across the country certainly backs this belief. However, while incoming students get ready to embrace the academic and social rigors of college life, many will have their most difficult test before they even arrive on campus …paying for tuition.

The cost of tuition continues to skyrocket. In fact, on average, the cost of college tuition at both public and private universities has doubled over the last 20 years. The news is not all bad though, as the selection of financing options and financial aid packages available to students continues to grow. Before you begin exploring the many different choices, consider these tips from GMAC Bank, which offers private education loans for undergraduate, graduate and continuing education students.

Know your costs
The first step in financing a college education is to get a clear picture of how much it will cost, and to begin building an annual budget for each year of college, per student.

“You need to look beyond just the tuition of a college or university,” says Debra Scott, director of the education loan program for GMAC Bank. “College expenses also include dorm fees or rent for off campus apartments, meal plans, the cost of books and other miscellaneous fees, even the cost of traveling home during school breaks.”

Know your options
Today’s students and parents need to be savvy about uncovering programs that can offer financial assistance. While the variety and choice of options might seem confusing, the best starting point is to consider three primary sources: federal assistance, scholarships and private loans.

* Federal Assistance
Begin your financial aid quest by looking into grants and loans offered by the federal government. For example, federal grants such as Pell Grants can range from $100 to $4000 per year based on level of need and do not require repayment. Federal student loans, such as the well-known Stafford or Perkins loans, are available for undergraduate students, graduate students, and for parents of dependent undergraduate students, and do require repayment.

* Scholarships
Like grants, these are funds used to pay for higher education that do not need to be repaid. Scholarships are offered by a wide range of institutions — from awards offered by your potential college or university, to those bestowed by local organizations, corporations, and a variety of other sources. Scholarships are awarded based on a variety of criteria (not all are based on academic performance or financial need), so be sure to check for further information on eligibility. Leave no stone unturned in your search as many scholarships go unused each year.

* Private Student Loans
Another option is the private student loan. Flexible by nature, this type of loan can cover all, or a significant amount of your tuition and other expenses. Private loans can be used to cover any cost associated with attending school, such as tuition, books, computers, travel and living expenses. Typically deferred until after graduation, they also can be used in coordination with other sources of funding. For example, a financial aid package may only cover tuition and board, so a private student loan may be helpful in paying for other education-related expenses.

“Students should realize that they are not limited to one type of financial aid,” adds Scott. “More and more students are funding their education through a variety of sources including a financial aid mix of private loans in combination with savings, federal loans, grants, or scholarships and part-time jobs.”

Arranging financing for college is the first real life lesson in managing money that many young people will experience. With some thorough research, you could be well on your way to getting an “A” in Financial Aid 101. For more information visit http://www.edloans.gmacbank.com.

Courtesy of ARAcontent

Creative College Funding Secrets

Jennifer — Sun, 05 Aug 2007 04:41:10 +0000

To put into perspective the ever-rising cost of college tuition, consider this: chances are good your first car cost less than your child’s first year of college. And if your child opts for private school education, the total bill for four years could come close to what you paid for your first home.

According to a recent report by the College Board, Trends in College Pricing, the average tuition at four-year public colleges and universities for 2006-07 was $5,836 — 6.3 percent higher than it was in 2005-06. When you add fees, room and board, the costs rise to $12,796. The costs at four-year private colleges are even higher – $30,367 total charges, an increase of 5.9 percent from 2005-06.

Financial experts agree that the best way to tackle the cost of your child’s college tuition is to start saving when they are still infants. Even if your child is already school age, putting aside money now can help defray the cost of their higher education in a few more years. With a wide array of savings and college funding plans offered through financial institutions, states and federal governments, parents need only think ahead and perhaps get a little creative.

For Kevin and Kara Weinand of Washington, that meant looking to their container of loose change — roughly $1,500 originally intended for a vacation — which they’d accumulated over the years and kept in a 5-gallon water bottle at home. And with the help of the “big green” coin-counting machine at their local supermarket, the Weinands were able to start a college savings account under their state’s version of the federal 529 college savings plan.

“Originally I started putting my spare change aside a number of years ago with the plan of using it someday for a vacation,” says Kevin. But the birth of his son, Kyle, changed everything, including his savings plans. “When Kyle was born, I imagined what things would be like when he got older. I knew that the cost of education increases every year and thought it would be wise to put this money to a better use.”

Many college savings plans under the 529 federal tax code allow parents to pay in advance for their child’s college tuition. In Washington, where the Weinands live, the state guarantees the funds. “Essentially, we’re pre-paying Kyle’s tuition 18 years from now at today’s tuition rates,” Kevin explains. “The fund is not tied to any particular school and we can use it at any public or private university that honors the 529 programs through the U.S. Department of Education.”

Coinstar coin-counting kiosks are in supermarkets and other convenient retail locations across the country, so it’s easy for just about anyone to start a college fund or apply their new-found money for other purposes. Consumers simply take their change to a Coinstar kiosk, have it automatically counted, and receive a receipt exchangeable for cash.

“Dealing with the financial demands of parenthood, new parents can often find spare cash in short supply,” says Alex Camara, senior vice president and general manager of worldwide coin at Coinstar, Inc. “But almost everyone has spare change. Saving those coins and cashing them in can be a great way to supplement their effort to save for their child’s college education. The average American household has about $90 in spare change lying around the house.”

To find a Coinstar location near you, visit www.coinstar.com.

Courtesy of ARAcontent