This time of year I talk to many people who are scrambling to come up with tax deductions before the end of the year. Maxing out your deductible 529 plan contributions each year is a good idea and should have a place in that strategy. But before you rush to write a check by Dec. 31, check your state’s contribution deadline for tax purposes. Some states Continue reading 529 Contributions for Tax Purposes
Most of us don’t have the full four years of college expenses socked away in a 529 plan when our student starts college. That means that most of us use a combination of savings, out-of-pocket spending, and borrowing to pay for college.
It’s logical to assume Continue reading Spending Down a 529 Account
Many people call themselves “financial advisors” when they should in fact be called sales people. A number of these types are active right now telling parents of high school juniors and seniors that they should buy annuities or life insurance to help themselves in the financial aid process. This “investment” is not as helpful as you might think. Continue reading Life Insurance and Annuities
One great thing about living in the Big Data world is, there is data available on just about any topic. One topic that those going through the college application process should be concerned about is, are graduates of the schools I’m interested in financially solvent? With more than half of students borrowing to pay for college and average loan balances of about $30,000 upon graduation, one way of figuring out the financial solvency of graduates of a particular school is to look at their student loan default rates. Fortunately, the US Department of Education makes that information available here. Click on GO next to “Search the Cohort Default Rate Database,” then enter a school name.
The data are 3-year default rates, so the most recent data is from the class of 2012.
While the federal government is the largest provider of financial aid, states also provide aid. There’s a big difference, too: Most federal aid comes in the form of loans, whereas a new study from NASSGAP (National Association of State Student Grant and Aid Programs) shows that over 90% of aid provided by states comes in the form of grants. Continue reading State Financial Aid