MONEY MANAGEMENTFrom the Virginia Society of Certified Public Accountants - Presented by Dean Knepper, CPA, CFP®
GREAT LAST-MINUTE COLLEGE FINANCING IDEAS
(September 1, 2007) -- College education costs continue to spiral upward. In the 2006–2007 academic year, total college costs, including tuition, fees, room and board, averaged $12,796 at four-year public colleges and $30,367 at four-year private colleges, according to the College Board. But there’s no reason to lose hope if you have a child who will be attending college soon and you haven’t begun to save. There are options available for parents whose college nest egg is not what it should be, according to the Virginia Society of CPAs.
Find those financial aid dollars
Nearly two-thirds of full-time students receive some form of aid from federal and state governments, colleges and universities, and other private sources, the College Board reports. CPAs advise that if you think you may be eligible for federal student aid, you should file the Free Application for Federal Student Aid (FAFSA). There are many types of aid available, including loans, grants, scholarships or work study programs. You can find out more at www.fafsa.edu.gov.
There are numerous other sources of financial aid beyond the federal government. The College Board site (www.collegeboard.com) offers advice on conducting a scholarship search and provides links to several free search services.
Remember also to look close to home for college dollars, including scholarships that may be available from community organizations or from your employer. Be careful, however, not to be taken in by scholarship scams. The Federal Trade Commission (FTC) warns against working with unscrupulous companies that promise to find financial aid in exchange for a fee. The FTC offers tips for parents at www.ftc.gov/bcp/conline/edcams/scholarship.
Seek a great match
Students who apply to colleges where their grades and test scores are securely in the top 25 percent of the student body are more likely to get generous aid packages. Although there’s no guarantee, most colleges battle to attract the best students they can — and they’re often willing to offer them better grants and other financing assistance.
State your case
What happens when a school has accepted your child and offered some aid, but not enough to realistically cover your expenses? There’s no harm in asking for more. It’s best to arrange to meet the financial aid officer in person and to let him or her know that the school is your child’s top choice, but the family just can’t swing the payment. Don’t try to haggle with the aid officer, but do present your situation candidly.
Start at a community college
Some students may have their hearts set on attending a prestigious college, but their families may not be able to afford the high tuition. To solve the problem, many begin their studies at a less expensive community college and even live at home during the first year or two, then transfer to and graduate from a more elite school. Your child graduates with the same degree at a much lower total cost. Before taking this step, though, find out what amount of transfer credit your ideal college will accept and what grades students must earn in order to transfer.
Maximize tax benefits
College savings plans, such as 529 plans, make it possible to invest money
for college that can grow tax free. It’s best to start saving early. Your
state’s 529 plan may provide a state income tax deduction or credit for
contributing into the plan.
Studies show that college graduates earn about 75 percent more than high school graduates through the course of their working lives, so a college degree is a worthwhile investment. If you have a child heading to college soon, consult your CPA about the many options for funding his or her education.
The Virginia Society of CPAs is the leading professional association dedicated to enhancing the success of all CPAs and their profession by communicating information and vision, promoting professionalism, and advocating members’ interests. Founded in 1909, the Society has nearly 8,000 members who work in public accounting, industry, government and education. This Money Management column and other financial news articles can be found in the Press Room on the VSCPA Web site at www.vscpa.com.
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