In my last two blogs, I wrote about researching bank accounts and finding a credit card for my daughter Chelsey, who is a junior at Emerson College in Boston and currently spending a semester abroad in London. As promised, in this blog I’ll write more about saving the money she is now spending in London.
In a previous blog on the JPP website, Van Nguyen wrote about saving for college with 529 Plans. Please read Van’s blog if you get a chance. 529 Plans are an excellent vehicle to use for college savings. As with any investment advice you read or hear about, please speak to your Financial Strategist about your unique financial situation.
My husband and I started saving for our children before 529 Plans were created. We started with Uniform Gift to Minor accounts, we opened Coverdell Education IRAs when they were established, and eventually we opened 529 Plans when that option became available. Chelsey is the youngest of my 3 children; my sons graduated from the University of Notre Dame and Penn State University. We have lots of experience saving for college, and spending on college!
One thing I always like to tell my clients is not to fear the high cost of private universities. Universities like Notre Dame have huge endowments. The endowments are there to make the cost of attending these private universities more affordable to families. The cost of tuition, fees, room and board at Notre Dame is $54,905 for 2012-13. That does not include books, supplies, transportation and personal expenses. On the University of Notre Dame website, they site that for the 2012 – 2013 academic year they gave over $110 million in need-based scholarships and that over 48% of all undergraduates receive some form of gift aid from the University. No matter your family’s financial situation, you have to complete the FAFSA form to have access to student financial aid, including college scholarships. Another important point is that when you have more than one child attending college simultaneously, you have a better chance of receiving aid from your child’s private university. The year my oldest son was a senior at Notre Dame and my younger son was a freshman at Penn State, we actually paid more to Penn State than Notre Dame. In addition, all students are eligible for an un-subsidized Stafford Loan of approximately $2,000 per academic year. I look at this as your child having “some skin in the game,” even if you decide to pay off the loan for your child after graduation.
College students can also contribute toward their education by working. Chelsey really wanted to spend a semester abroad, and knew that she wanted to travel throughout Europe while she was there. Chelsey made the decision to work two jobs while home this summer. She worked as a camp counselor at our local elementary school and also as a hostess at T.G.I. Friday’s. She worked diligently and saved a lot of money. She also worked for Emerson college last year, using the money she earned there as her spending money for the year.
In closing, there are many ways to save for college. Every family and each child will have different experiences. Please let me know about your experiences; I welcome your questions and comments.