529 plans grow in popularity due to the importance of children attending college to increase their professional prospects, all while the total expense of attending college has increased at a rapid rate. Ever since the Economic Growth and Tax Relief Reconciliation Act of 2001 which birthed these plans, the usage of 529 plans has increased due to their ability to grow investments tax free and be used on qualified educational expenses without incurring any taxes for selling those investments. So, the question for most people is how do you chose one?
The average tuition and fees at a public in-state university as of the 2018-2019 school year was $9,716, while the average private institution charged $35,676. Add in another $15K for room & board and other expenses such as books and the total sticker price to attend these types of schools tends to be around $25,000 and $50,000 respectively. As most of us know it normally takes 4 years to graduate from most undergraduate programs. But does it always have to? The phrase that “Time is money” couldn’t be truer when it comes to paying for college. The ability to finish a full program in three years versus four can alter the decision of whether you can afford a college, especially with prices being so high these days. Add to the fact that you not only limit cost, but you also are able to start earning a salary earlier on, and the financial rationale to finish college early is sound.
The most common answer as to why parents and students didn’t fill out the FAFSA is that they felt they wouldn’t qualify for any financial aid. Sadly, there are a lot of people who fall victim to this assumption and leave free money on the table that could otherwise go towards reducing the price of college tuition.
Student loans are an enticing way to cover the cost of education. With over a trillion in student debt distributed among the students of America and wages stagnating, however, the student loan picture for those seeking higher education is relatively bleak. For this reason, most students are better off avoiding student loans altogether if possible.
If there’s one thing we know for certain in life, it’s that change is inevitable. And while we recognize that we will walk through different phases and reach multiple milestones, we often don’t realize the financial impact they can have on our lives. Many aspects of life are outside of our control, but one thing you can control is how prepared you are for life’s biggest moments.
Most physicians prefer to get right to the point and don't care for all the fluff. They expect a short, concise explanation. After all, they are busy people so time is of the essence. With that in mind, I created a 5-page powerpoint style guide that explains how Public Service Loan Forgiveness (PSLF) works.
Having helped several clients overcome their own set of student loan problems, I decided the best way to get in front of the issue is to make more borrowers (and their parents) aware of what pitfalls they should be avoiding. Today's blog article will kick-off by examining the 4 most common student loan mistakes and what you can to do to avoid those landmines. Then, I present 2 case studies to show you how the numbers crunch out.
The impact of student debt borrowing decisions and how to pay for college, even at the beginning stages, is substantial. For my client, Anne, we are talking about a difference of $94,100. It's why college planning is essential for families with college-bound kids. Especially when your kid wants to pursue a higher cost degree like a doctor, lawyer, veterinarian, or pharmacist. Regardless of career path, the economics of making sound choices, when it comes to paying for college, will have a dramatic impact on your child's adult life.