How to Make College More Affordable and Practical for Your Lifestyle

College seems like a necessity if you want to get a good job. For some, though, the process of going to college just seems impractical. If you're looking for a better way to get through school, you may want to consider one of the methods below.

Do School Part-Time with Work

One of the most realistic ways to make college affordable is to cut down on your number of credit hours so that you can hold a job at the same time. Though it's hard to find a part-time job that you can use to support yourself during a full course load, it's easier to find one that works with a reduced schedule. 

Though it will take longer to graduate, choosing one of these programs does usually help many to make college a bit more affordable.

Attend online

Attending college online might be the best bet for those who cannot travel to school, for those who need to take classes outside of normal class hours, or who have commitments that would make it harder to go to a typical campus. 



There are many different online schools, including online colleges for military veterans. With a little research, you can find a program that's perfect for you.

Get Scholarships through High-Demand Majors

If you're looking for a way to bring the cost of college down, you might want to look at the majors that are in the highest demand. Many businesses offer scholarships for students who choose certain majors, with some even offering to pay all or a portion of a student's tuition if they work for the company. 

Engineers, doctors, teachers, and others can get scholarships simply because those jobs are in such high demand and companies (and schools) want to lock down potential employees as soon as possible.

Look for Accelerated Graduation Programs

For some, the problem with going to college isn't the money but rather the time spent at school. Four years can be a very long time, especially if you are a non-traditional student. If you're looking for a way to get through college more quickly, you may want to look for accelerated programs. 

These programs allow students to get through an advanced degree in a shorter period of time, shaving as much as a year and a half off of the total time spent in school by providing a higher load of classes.

There are solutions out there for anyone who would like to go to college. Whether you need financial help or just a way to attend classes, there are solutions that will work for you. If you're able to use one of the methods above, you may be able to make your dreams of higher education come true.

Start Early When Preparing for College Expenses

If you're the grandparent of a recent high school graduate, you're probably filled with many different emotions. Chances are that you feel excited for your grandchild's accomplishment but are also nervous about the future. The cost of college increases each year, and room, board, and rent aren't cheap, either. Add in the cost of textbooks, new clothes, and apartment belongings and the opportunity to go to college may seem slimmer than ever. There are, however, a few ways you can help your grandchild succeed should he decide that college is right for him.

First off, look at scholarships. Help your grandchild fill out his FAFSA to find out what sort of federal scholarships and grants he may qualify for, but also look at local scholarships. For example, many colleges offer private scholarships to students who choose a certain major or students with a certain background. A scholarship will help reduce the cost of attending college and can free up extra money that you would normally have spent on tuition.

It's also important to talk with your grandchild about financial responsibility. If he's ready, consider taking a trip to Lexington Law to meet with a financial adviser. A professional financial adviser will consult with you and your grandchild to talk about how to prepare for the future financially, how to make good financial decisions, how to avoid falling into debt, and how to resolve current debts if this is an issue. Additionally, your lawyer will be able to discuss different investing options for your grandchild to consider even while he is in college.

Finally, make sure you help your grandchild find an inexpensive, yet cheap place to stay. Remind him that it's more important to live within his means than to impress people by showing off how much money he has. It's easy for students to get caught up trying to show off to their friends and do things like buy a brand new car or charge an expensive sofa, but the truth is that these things are unimportant. A secondhand car or a secondhand couch work just as well as brand new items, yet don't mean going into debt to acquire. Remind your grandchild that what matters is his personal education and not making friends who need to be impressed.

How Much Does a Bachelor Degree Cost Around the World? - Infographic

Here is a great infographic depicting the cost of a bachelor degrees around the world. It’s interesting to see the costs in some countries. Also what you chose as your major will impact for the rest of your career what your income will be. Many parents do not realize the education their children are getting, for an insane cost, will lead to a poor paying job.

Cost of Bachelor’s Degree around the World

Scholarship Searching Made Easy With Scholarshipsonline.org

English: Graduation hugs (Photo credit: Wikipedia)

Undergraduate scholarships and graduate fellowships are forms of aid that help students pay for their education. Unlike student loans, scholarships and fellowships do not have to be repaid. Hundreds of thousands of scholarships and fellowships from several thousand sponsors are awarded each year. 

Generally, scholarships and fellowships are reserved for students with special qualifications, such as academic, athletic or artistic talent. Awards are also available for students who are interested in particular fields of study, who are members of underrepresented groups, who live in certain areas of the country or who demonstrate financial need.

The best way to search for scholarships and fellowships is to use a personalized search, like Scholarshipsonline.org, a scholarship search website, that compares your background with a database of awards. Only those awards that fit your profile are identified as matches.

There are several free scholarship databases available online. With more than 1.5 million scholarships worth more than $3.4 billion, the Scholarshipsonline.org scholarship search is the largest, most accurate and most frequently updated scholarship database. If you supply an email address, they will notify you when new awards that match your profile are added to the database. You can even submit an electronic application to some of the scholarships listed in the Scholarshipsonline.org scholarship database, saving you time and money. Scholarshipsonline.org also includes a college search and numerous other student resources.

In addition to the Scholarshipsonline.org scholarship search, you may want to search one of the other free scholarship search sites. It doesn't take much time to search and it's free. To find small local awards that aren't listed in any book or database, look for notices posted on bulletin boards at your school's guidance office, the public library and outside the financial aid office at nearby colleges and universities.
You can also search for scholarships using your favorite web search engine by including the word "scholarships" with your search keywords.

College alumni and other private scholarship sponsors occasionally establish scholarships with esoteric eligibility requirements, such as a scholarship for left-handed students. Although there aren't many of these unusual scholarships, they often attract a lot of attention because of their slightly offbeat nature.

The most prestigious scholarships and fellowships also attract a lot of attention because they are among the most lucrative and competitive awards. Many colleges also offer full tuition academic scholarships.

Average students often ask whether there are any scholarships available to students who don't have a 4.0 GPA. There are many scholarships for average students that focus on qualities besides academic merit, as well as a variety of less competitive scholarships. There are also many community service scholarships and scholarships for Hispanic and Latino students.

Don't waste your money on fee-based scholarship matching services. You won't get any better information than you can get from the free services available on the Web.

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3 Tips for Helping the Family Through University

(Photo credit: Wikipedia)

The students have just gone back to University, but for many it’s their first time in the big cities, having to fend for themselves and make sure that they're up in time to make the first lectures of the day! While the early birds will have no problem with that task, others might find it a little more difficult, so anything we can do to help make their time at Uni simpler can only be a good thing right? 


Whether it’s our own children or the Grandchildren who've gone off in search of the foundations they need to build their future careers, they’re likely to realise how important it is to budget between student loan payments. 


But before they get bogged down and depressed by their poor financial situation – a factor every student, unfortunately, has to deal with – there are a number of things you can do to help them. 

Budgeting Lessons 

If they haven't gone already, or if you get the chance to sit down with them sometime soon, work out exactly how much they have in their account, how much their rent is each month, and when the next payments are due both in and out of their banks. This way you can chat clearly and easily, showing them exactly how much money they have to “play” with, and how much they're able to spend each week, helping them to stay out of the red, and in the black for as long as possible.

Shopping Tips 

Shopping is a key part of student life, popping down to the supermarket and buying trolleys full of baked beans, pizzas and drinks, but many students don’t know how to get as much as possible for as little as possible. You don't need to be one of the top accountants based in Dublin, London, Manchester or Edinburgh to know how to make savings. Own-brand products can be significantly cheaper than the brand named products, but with little or no difference in taste, something you've worked out with your experience of doing the family food shop that they might not have realized. Let’s be honest, students won't notice the difference once it’s out of the packet anyway, they'll eat anything!

Regular Communication 

Possibly the most important thing is to stay in touch while they're away. The last thing you want to find is that the reason you haven't heard from them in a few days or weeks is because they're worried about telling you they've run out of money. By staying in regular contact, you can gauge how they are. This isn't to say you should ring them every day, (they’ll soon stop answering), but maybe once a week at least if you haven't heard from them beforehand.

Related articles

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• Ways To Get College Loans Without Having A Cosigner (savealittlemoney.com)
• Six Tips to Help You Qualify for Financial Aid for College (50plusfinance.com)
• Help Your College Graduate Decide - Work or Grad School (50plusfinance.com)

4 Ways to Save Money on Expensive College Textbooks

iPad vs. Textbooks (Photo credit: Abstract Machine)

In another week my kids will be returning to college. Besides paying the tuition and fee's, colleges have to gouge you one more time by charging insane prices for textbooks. For many years the college bookstore has been the only source of these books but thankfully things have changed.

A course my daughter had to take called for an expensive book for her Chemistry class. The college bookstore wanted to charge $226 for it. Today, if I went on Amazon the book was going for $147. A third party vendor on the Amazon Marketplace was selling the same book for $98. Not bad. But lets try for a better deal.

A real lifesaver for parents and students is the companies that rent text books. This expanding and growing business has exploded because it has provided students with their required textbooks for a price which is at a fraction of the cost of a new book purchase. The required chemistry text book mention previously rents for $24 at many textbook rental websites. That's an overall savings of $202, wow!

Textbooks have become a commodity. The same version of textbook, rented by many online sources allows the costs to come down. The success of the textbook rental business has made them affordable again. Now it's just a game to find the cheapest source for your textbook. To save money sourcing your textbooks I have listed a few tips to help you get started.

Shop early. Campus bookstores usually carry a good number of used books, but if students wait too long, they could be forced to go new or look elsewhere.


1. Look online. This is pretty obvious, but there are still some students who go by the book and buy all their books at the bookstore. Be careful of shipping costs; most big rental websites offer free shipping, but buying new and used could incur big shipping costs. Amazon is the kingpin, but Half.com, AbeBooks.com, or BigWords.com may have better deals, depending on what students are looking for.

2. Go digital. Electronic textbooks are really starting to become more of a factor in the textbook world. E-readers are gaining popularity and offer students an easy and convenient book-reading experience. It's important to look at software requirements, however, as some computers can't run certain book software. E-books usually don't come with access codes or accompanying CDs, either.

3. Don't buy, rent. Renting books can save a lot of money, that's no secret. Renting also eliminates the dreadful book-selling process at the end of the semester. CampusBookRentals, Chegg, and BookRenter are the big players in the rental business, and those companies advertise up to 90 percent in savings over the retail cost of books. Don't miss the due dates because there are late fees and they can make a dent in the savings.

4. Save your receipts. The American Opportunity Tax Credit may be available to students who qualify because of textbook and other out-of-pocket higher educational expenses.

Students can save up to $2,500 on their 2012 federal taxes and up to 40 percent is refundable. The full $2,500 is available to those who pay $4,000 or more in qualified expenses for an eligible student.

Another avenue for textbook shopping seems to be on the horizon. PostYourBook.com is a social networking website dedicated to connecting users so that they are able to buy and sell textbooks with each other. Students are able to search textbooks and find the best possible price, and then exchange books with other students from their school.

My hope for the future is for textbooks to go totally digital. Apple Computers new platform for digital textbooks is incredible. An entire textbook can be uploaded to an iPad. It has the entire book and also the capability to have video and audio. For an affordable rental fee a textbook can be used by a student during the semester and afterwards can be erased when the semester is up. This purely electronic supplying of textbooks would be environmentally better and increase the bottom line for textbook providers. And of course save parents lots of money.

How to Balance College Saving and Retirement Saving - Infographic

In the United States, only half of the population have anything saved for retirement. When saving for our children's college expenses, we do an even worse job. What's the problem? If you ask the average person they will complain that their income is so meager that just making ends meet, takes all their effort.

Saving for college and retirement expenses is quite an effort for most people but the key is to start early. If you put away an amount of money, month by month and year by year, it will help you accomplish your goals.

Ask yourself, over the years how much money you have wasted on frills and fads. Add up all that wasted money and imagine what you could of done with it. It's not to late to turn it around. Start today, budget your money, live below your means, and save all you can.


Check out this great infographic about saving for college vs. saving for retirement. 

Thanks to Caxton FX Currency Exchange for this great graphic.

Help Your College Graduate Decide - Work or Grad School

Graduate School of Education Diploma Ceremony (Photo credit: fordhamalumni)

Your son or daughter just graduated with their four year degree. You are relieved because the financial stress of paying college is over. Your happy that your child got a great education. Your planning and hard work has paid off and now you can use your money to do something to better your own life. Think again.

Dreams of grad school have been pervading the thoughts of your new graduate and they are thinking of continuing college to pursue a graduate degree. Maybe jobs are scarce and now would be the perfect time to get that masters degree.

I am about to face this decision in my own home. My daughter has one more year to go with college and she thinks her chances of being hired would increase if she went for a masters degree. In her field, there are jobs that a bachelors degree would be adequate. We have been discussing it for a while and no decision has been made yet. 

If you are experiencing this same dilemma I want to offer you a few things to think about before making a final decision.

1. Make sure the extra degree will payoff. Going to grad school is no cheap proposition. You can invest 10's of thousands of dollars pursuing an advanced degree. Be sure it's going to make a real difference. 

Seek out people who already have the degree and inquire if it really is necessary. Talk to hiring managers, ask them if the grad school degree is something they see as valuable. 

When considering grad school be careful not to rule out working for a while in your field in an entry level job. There could be jobs available. Sometimes we get caught up in the education process and put to much weight into the schooling and not working.

2. Consider going part-time.

The cost of grad school, according to Money Magazine, can average $22,000 a year for a public university. With a private university costing $34,000 a year. Why not cut down on these costs by attending part-time. This way you may not have to take student loans and you will be able to work. Depending on your employer, you may even be able to have your employer help pay for your education. You trade a future commitment at your job for a free education.

3. Government assistance.

If you are so determined to go to grad school you are still able to qualify for student loans. You need to fill out the FASFA form and go through the process but you will have the money needed to attend grad school.

4. Take all available tax breaks.

There are many tax breaks for returning students. If you make under $57,000 you can take advantage of the Lifetime Learning Credit. Even the use of 529 college savings plans are still available to you so you can shield earnings dedicated to funding education.

There is a continual controversy whether the parents should pay or the student should pay for post bachelor degree college. Some parents believe that a four year degree is their only obligation to their children and further studies is on the students dime.

If the parents have the means to pay the cost of grad school then why not pay. But if parents have been struggling all the while and maybe even under funding their own retirement isn't time to cut the cord and let the new grad stand on their own two feet. 

In my situation, grad school will be a cost my daughter will have to provide. Luckily for her and me she will be able to find a entry level job with her four year degree. She will be able to support herself and pay for her own grad school costs. 

Related articles

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529 Plans Diversifying with ETFs

(Photo credit: Wikipedia)

Diversification is the backbone to any investment plan. 529 plans are going to give investors more diversification by adding ETFs. They need to attract more investors and give them a larger choice of investments to purchase for their college savings plan. 

The 529 savings plans are a tax-advantage method for saving toward future college expenses. Parents can build a college savings fund that pays for a person’s room, board, mandatory fees, books, computer and tuition. Contributions in the 529 savings plan are not subject to federal tax as long as the money is used for college expenses. Today, mutual funds make up the largest share of the college-savings 529 industry.

Last year, on average, 529 plans lost almost 1% while the S & P 500 stock index returned about 2%. This caused a pull back in contributions. This addition of ETFs will not only hopefully attract more investors but also will give savers a more positive growth. 

Recently, Nebraska introduced four ETFs in three of its 529 plans. One of New York's plans recently added six ETFs, while Nevada's Upromise 529 moved almost exclusively to ETFs and away from mutual funds, which still dominate the college-savings industry. The addition of ETFs by 529 plans will give investors choices that will satisfy views that 529 investment choices are to risky.

What do the critics say?

The positive news is that they like the lower expenses ETFs offer. 529 plans with ETFs have an average expense of 0.61%, compared to the industry average of 1.12%. They claim 529 plan investment managers are adding ETFs in an attempt to make quick and easy changes to portfolio allocations at a fraction of the cost. ETF products can be traded throughout the trading day while mutual funds can only be reconstituted at the end of the day. 

Don't worry, the addition of ETFs are not changing the rules, you won't be allowed to buy and sell your investments in your 529 plan. 

These changes will attract more money in to the plans. You will have more choices in your investments. Diversification will benefit your 529 plans overall growth and help to minimize any market fluctuations. 

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Helping Your Grandchildren with College Expenses

Although most of us don’t have enough financial freedom to completely finance the college education of our grandchildren, there are still ways we can invest some money for their future schooling.

If you are interested in setting aside money for your grandchildren’s education, be careful to consider all the options available to you (savings and investment plans and tax-free gifting). One plan may be perfect for one person but not the best choice for you, so make sure you understand how every option works before making any decisions.

There are three options in particular that many grandparents find beneficial for their savings goals; 529 plans, savings bonds and tax-free monetary gifts.

529 Plans

With a 529, grandparents can put away money for their grandchildren’s education through either a prepaid plan or a savings plan. Prepaid plans allow you to purchase tuition credits. These credits match today’s inflation rates, so their performance is based on how much the cost of tuition rises by the time your grandchild goes to college. Not all states offer the prepaid plan. With a savings plan, all growth is based on the performance of (usually) mutual fund investments. As the beneficiary gets older, the investments in a savings plan become more conservative, just like a retirement savings account.

Distributions from 529 plans to pay for qualified college expenses are exempt from the federal income tax. Investors who contribute to a 529 plan in their state of residence also often receive state tax advantages, exemption from state financial aid calculations and other benefits. Donors maintain control of the account, and most plans allow benefactors to reclaim the funds for any reason, at any time with no penalties. However, if a non-qualified withdrawal is made, the earnings will be subjected to an income tax and an additional 10% penalty tax.

Savings Bonds

Government savings bonds can be given to your grandchildren as birthday or Christmas gifts when they are very young. This gives the bonds plenty of time to mature before they are cashed in for college. The most common type of bond purchased to fund education is the T-note. It earns a fixed rate of interest every six months and is issued in terms of two, three, five, seven and 10 years. This means that you can’t cash in your purchased bonds until they have reach those terms, but the longer you allow them to sit, the more interest they will earn. The minimum purchase amount is $100.The income earned from interest is subject to a federal income tax but exempt from any state or local income taxes.

Tax-Free Monetary Gifts

If you are interested in giving a larger sum of money to a grandchild who will be attending college very soon, you may want to choose the tax-free monetary gift route. Most monetary gifts are subject to a tax, but grandparents can avoid that tax by giving their gift directly to the educational institution their grandchild plans on going to. Donors must make sure that the beneficiary is serious about graduating from that school, though, because there aren’t any hard rules that require schools to return the money if the child drops out. However, if the student has serious plans to graduate, a tax-free gift is the best way to transfer wealth and know that it will be used for its intended purpose.

For more information on college savings plans for your grandchildren, contact your local licensed financial advisor.

Nadia Jones is an education blogger for onlinecollege.org. She enjoys writing on topics of education reform, education news and online learning platforms. Outside of the blogging world, Nadia volunteers her time at an after school program for a local middle school and plays pitcher for a local club softball team. She welcomes your comments and questions at nadia.jones5@gmail.com.

• The Best Way to Save for College: A Complete Guide to 529 Plans 2011-12 - Book Review

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Should You Move Your UGMA/UTMA Accounts to a 529 College Savings Plans

English: Graduation (Photo credit: Wikipedia)

Both UGMA and UTMA accounts, together generally referred to as UGMA accounts because they're so similar, pale in comparison to 529-plan accounts, which were created in 1996.

"The biggest reason is tax savings." says John Wiggins of WhatIsA529Plan.com, "All the earnings from investments in a 529-plan account are tax exempt, while only a portion of the earnings in a UGMA or UTMA account are tax exempt."

Under one scenario, the 529-plan account would actually be owned by the UGMA or UTMA account. Experts in college saving say the tax advantages associated with 529-plan accounts, and the fact that the stock market has been so weak lately, make such a move doubly attractive.

In a 529-plan account, investments grow tax free and, under the Tax Relief Act, distributions for educational expenses are taken tax free as well. Only a portion of the earnings in UGMA and UTMA accounts are tax free.

When a child is under 14, the first $750 of earnings each year is exempt from federal and state taxes, the second $750 is taxed at the child's rate, and the rest is taxed at the parent's rate. If the child is 14 or older, all earnings are taxed at the child's rate.

Liquidating UGMA and UTMA account assets, however, and then taking the proceeds and putting them into a 529-plan account can bring a host of problems - most of them relating to ownership.

UGMA and UTMA accounts are custodial accounts, the contents of which belong to the child, meaning the assets of the 529-plan account purchased with the proceeds of the liquidated assets of a UGMA or UTMA account would belong to the child.

Normally, the assets of the 529-plan account belong to the parent.

UGMA and UTMA accounts also present a problem with respect to financial aid for college. Most financial-aid formulas impose a penalty for assets owned by the student.

They also pose a problem for parents who just need to get ahold of the money in an UGMA or UTMA account. Because the accounts are irrevocable gifts, the assets in them must be used for the child.

A 529-plan account is not irrevocable, although there is a 10% penalty on earnings for taking the money out before the child reaches a certain age.

Of course, issues of ownership can be sidestepped by just spending down an existing UGMA or UTMA, using the proceeds for the child's needs and buying a 529-plan account with new dollars independent of the UGMA, says Joseph Hurley, founder of Savingforcollege.com.

Even Mr. Hurley admits that such a solution might not work for a child from a family that just doesn't have the money to sink into a 529 plan.

Of course, the custodian of a UGMA or UTMA account could just liquidate the account and move the money into a 529-plan account without telling the 529-plan administrator where the money was coming from, suggests one financial adviser.

Such a move would be illegal, and the adviser recommends against it, but because there are no "UGMA or UTMA police," he says, he believes the practice is widespread.

Whatever the approach, it appears that 529-plan accounts are financial advisers' tool of choice for college savings. Consequently, it would be natural to assume that UGMA and UTMA accounts are on their way out. But Mr. Hurley says he doesn't think that's the case.

While many people use UGMA and UTMA accounts to save for a child's education, unlike 529 plan accounts, they are not necessarily intended for that purpose.

"Small custodial accounts still can be very useful," he says. "You don't have to use them for any particular purpose."

Here is a side by side comparison of 529 Plans and UGMA/UTMA Accounts:

	529 College Savings Plan	UGMA/UTMA Account
What you can do	Invest tax-free for college.	Invest on behalf of a minor for any purpose.
Ability to change beneficiaries	Yes.	No.
Controlled by	Person establishing the account.	Custodian, until the child is of age.
Uses	Qualified college expenses.	Any expense that benefits the child.
Impact on federal financial aid eligibility	Considered asset of parent or other account owner.	Considered asset of child.
Contributions state tax-deductible	Varies by state.	No.
State tax on earnings	Varies by state.	Depends on child's age.
Federal tax on earnings	No, if used for qualified expenses.	Depends on child's age.
Penalties for nonqualified withdrawals	Federal income tax plus 10% penalty tax; state penalties vary.	No.
Contribution maximum per beneficiary	$200,000 to $300,000 or more, depending on state.	None.
Investment options	Portfolios consisting of a variety of investments, including age-based options that adjust automatically.	UGMA: mutual funds and securities. UTMA: mutual funds, securities, real estate, royalties, patents, and paintings.
Estate planning impact	Contributions are removed from estate.	Contributions are immediately removed from estate.
Income limitations	No.	No.

Whatever decision you make be sure you contact your financial adviser for consul and help with doing this.

529 College Savings Plan - 3 Factors to Check Before Picking a Plan

If you are thinking about opening a 529 College Savings plan for your child you may be confused by the shear number of choices you have to pick from. You do not have to pick the 529 plan from your resident state. You are able to choose from any states 529 plan but be sure to check if your home state offers special tax incentives.

529 plans in themselves are not confusing but picking one that suits your needs and your pocket book may take a little extra time.

According to WhatIsA529Plan.com, there are 3 factors to look at to make sure you pick the right plan that does what you want it to, for the least expense.

1. Investment Options. There are as many types of plans as there are ways to invest in them. The plan you may chose has a wide selection of investments from conservative to speculative. Picking the right one for your goals and age of the child is imperative. You can even pick the types of investments whether they be within the U.S. or globally. Picking the right ones means the difference between good growth and poor growth. It would be smart to get some good advice and recommendations from knowledgeable professionals before investing.

2. Costs. Costs subtract from your bottom line. A percentage or 2 can really add up over the life of a 529 Plan. Don't let that 1% slip away into someone elses pocket, it belongs in yours, so shop around to get the smallest expense costs.

3. Tax Benefits. Before selecting a 529 Plan out of state be sure to check your in state plan. If it has tax benefits on your state tax return it pays to invest within state even if you prefer an out of state plan. Check with your states tax rules to see if you can still invest out of state and claim the tax deduction.

There are currently 21 states where residents can choose any 529 plan without considering the impact of a state tax deduction: 

No state income tax -- Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming

No deduction for any 529 plan contributions -- California, Delaware, Hawaii, Kentucky, Massachusetts, Minnesota and New Jersey

Deduction available for contributions to any 529 plan -- Arizona, Kansas, Maine, Missouri and Pennsylvania

All other states give a state tax benefit for saving to the "home state" 529 plan.

529 plans are a great tool for funding college expenses, and selecting the right plan can be complicated. A good starting point is your home-state plan if you get a state tax benefit. If you live in one of the 21 states listed above, I recommend using the Nevada, New York, Utah or West Virginia plans, as those states offer passive investment options at a low cost.

College Financial Aid Choices Can Be Confusing - Infographic

When making plans for paying for your college education the process can be confusing. If you have ever filled out a FASFA form you know what complicated means. But many people make it through he maze of paper work because the government grants help take some of the sting out of paying hefty college costs.

This detailed infographic depicts the many different and complicated processes you have to go through to finance your child's college education costs. Gladly for me I only have to go through this one more year.

Brought to You by SNHU.EDU Online College Programs

Save Money for College with Upromise Shopping

Upromise (Photo credit: Wikipedia)

Upromise is rewards program you sign up for that allows you to save money for college or pay off student loan debt. It's not a 529 College savings plan.

Upromise has its own website where you can earn rewards by making purchases through its portal. They have a list of over 600 online retailers who are partnering with Upromise shopping deals to save you money and add to your college savings. The cash back rewards range from 1% to 25% depending on the purchase and the store. Large stores like eBay, Target, Walmart, and JC Penny all have joined with Upromise. Also the Home Depot, The Apple Store, Dell, Verizon Wireless, and Macy’s are all on board with UPromise.

You an also register your credit and debit cards to earn cash rewards. Some restaurants that participate can earn you rewards of up to 8%. If you use your registered debit or credit card at Upromise program restaurants your earning a high percentage reward. Imagine over the years by just dining out 8% of the total is going into your account.

You can also use your Upromise at your grocery store, supermarket, and drug store. You can even just register your grocery or drug loyalty cards with Upromise and even use cash on purchases.

The best yet, you can register your friends to your account and earn rewards on their purchases.

How can I redeem my my earned rewards?

• Deposit your cash back into a 529 education investment account for you or a family member.
• Transfer your cash back to your student loan to help pay off your debt.
• Move your rewards to a Sallie Mae high-yield savings account.
• Request your rewards to be sent to you in the form of a check.

Upromise offers you a way to save money for college and get some pretty good discounts on everyday purchases you already make.

Roth IRA vs. 529 plan - Which is Better for College Savings?

Roth IRA (Photo credit: Philip Taylor PT)

In USA Today they had a story that compared Roth IRAs to 529 Plans.  It said when it comes to saving for a child’s college education, a Roth IRA might be a better investment than a 529 Plan. I agree the column is right in suggesting that anybody who is thinking about saving for a child’s college expenses should consider a Roth IRA instead of, or in addition to, a 529 Plan.

The 529 Plan

A 529 Plan allows contributions to grow tax-free and distributions to be made without any taxes or penalty, if the distributions are for qualifying educational expenses.  So if you take $5,000 today, put it away in a 529 Plan for your child’s college, and it grows to $10,000 in 10 years, you can use that $10,000 for college and not owe any tax on your $5,000 in growth. But what if you need the money, or your kid decides not to go to college?  Well if you end up taking a withdrawal from the 529 Plan for something other than qualifying educational expenses, the earnings become taxable, and there’s a 10% penalty assessed on the earnings portion of a withdrawal.  

Benefits of the Roth IRA

Roth IRAs are designed for retirement savings, but are flexible because of the withdrawal rules.  At any time after the Roth IRA is established, an individual can withdraw contributions that were made to the Roth IRA for any reason without any penalty.  If an individual has had a Roth IRA for at least five years, contributions and earnings can be withdrawn without any penalty and without any taxes if the distribution is a qualified distribution (examples of qualified distributions include distributions after the individual has reached age 59 1/2, or a withdrawal to help the Roth IRA owner or a qualifying family member buy a first home for the individual or a family member).

Where they Differ

Distributions from a Roth IRA to pay for qualifying educational expenses aren’t treated quite the same as qualifying distributions, since the earnings portion of the distribution is subject to tax. This is a key difference between the Roth IRA and the 529 Plan, where earnings distributed for qualified educational expenses aren’t subject to income tax.

Which is Best?

Roth IRAs easily have 529 Plans beat if you want flexibility. 529 Plans are state-sponsored programs and come with limited investment options which typically include mutual funds, CDs, and bonds.  With Roth IRAs, investors can actively manage the account and have a much broader array of investment options.

In addition to earnings being subject to income tax when distributed for educational purposes, Roth IRAs have a few other shortcomings as compared to 529 Plans.  529 Plans allow for significantly greater annual contributions. Roth contributions are capped at $5,000 for individuals under 50, or $6,000 for individuals 50 and over. 

If you are considering setting up or continuing to fund a 529 Plan for a child, you should consider contacting a financial planner to discuss whether a Roth IRA might be a better option for you.  Not only can a financial planner help you determine whether a Roth IRA is appropriate, but he or she can also help you navigate the rules regarding contributions and withdrawals.