How Much College Can I Afford?

ERSITY How Much College Can I Afford? U ARTS COLLEGE C UNIVERSITY UNIVERSITY BUSINESS 1826 how much tiỉme do you have to save? 1876 COLLEGE my kid is stilI in diapers Kudos to you for starting early! Any money you invest now will be well-positioned to grow-you can even try higher-yield investments that may see short-term losses ШШ IIIIIIIITIIII my kid is in elementary school UNIVERSITY but will pan out over time. 1876 my kid is a tween You could have started earlier, but don't worry-there is still plenty of time my kid is in high school You're off to a late start, so get ready to pinch your pennies, and do you already have funds sitting somewhere? be open to other sources of my kid has already been accepted. How many kids are you saving for? funding. Just the smart one. others will have to get by on their good looks.) All of them. (Theyre not living with me when they grow up.) Even if you are eligible for financing, it will come at a premium; to avoid paying $0.05 or more in interest on every $1 you borrow, work now to pull together as much cash as you can. Action: Follow the no directions for calkulating number of months until savings targets for a single child Action Calculate the toal your youngest child wl begin college. yes! in a 529 or coverdell Fantastic! 529 (c) and Coverdell accounts offer the most flexibility (both in terms of investment and usage of funds) Between December 2007 and December 2008, total 529 assets declined by 19%, but were 21% higher by June 2011 than they had been before the decline. how much college are yoU willing to pay for? yes! in a prepaid tuition plan Most prepaid tuition plans restrict usage of funds to state schools. If you are considering using this mechanism, read the fine print. what is wrong with community college? Community colleges give you the most bang for your buck, with courses costing only a few hundred dollars per unit (if that!) As of June 30, 2011, there were 1.3 million active state prepaid tuition plan accounts with an average value of $15,640 50% of four-year students attend colleges that cost less than $10k/year lets stick to state schools. State schools can be priced, at -$15k/year, but admission rates for in-state applicants are declining. ore reasonably i will help pay for the right private college. The average private college or university costs, -$40k/year 4-year private college costs Annual Tuition + Room & Board - 2011-12 Enrollment Year $40,000 it is harvard or the highway The average all-in cost of tuition to top private universities is currently -$50k/year, Public 4-year in-state: $17,131 Public 4-year out-of-state: $29,657 Private not-for-profit: $38,589 which includes tuition, room & board, but $35,000 not all fees or incidentals. $30,000 $25,000 $20,000 $15,000 The Math: Add 15% $10,000 to the total tuition cost; $5,0000 after all you will have to make sure you or your children can afford to eat and cover other expenses like books. how do you feel about other sources of funds? federal loans for students Up to $23k is available in subsidized Stafford loans, as well as an additional $8k in unsubsiidized loans for dependent undergraduate students; independent undergraduate students (those whose parents don't take out a PLUS loan) may borrow an additional $26,500 Congratulations! Get saving, and redo your calculations each year to account for any interest you may have earned. Save as close to your target as possible, and consider making Junior responsible for certain (or additional) student loans. Research private grants and scholarships to help relieve the burden. i can easily afford to save the monthly amount. private loans Lenders like Sallie Mae specialize in student loans, but so do other institutions, such as credit unions and banks. Tip: For great rates, check out schools with their own credit unions, such as University of Chicago, Mount Holyoke College, MIT, and the California State University system. i can afford to save the monthly amount. barely. Be willing to settle for more favorably-priced schools if you can't reasonably afford your target schools. It's fine to apply to expensive schools and hope for scholarships and grants-but have some schools you can afford waiting in the wings. grants and scholarships Free money is out there-you just need to know where to look. Start by filing the FAFSA (Free Application For Student Aid), which will signal to target schools that you are open to receiving additional funds, and making yourself eligible for school-sponsored grants and work-study. monthly amount. not by a long shot. i can t afford to save the federal loans for parents and grad students PLUS loans are federal loans that grad students and parents of dependent undergrad students can use to help pay education expenses. They have a fixed interest rate of 7.9% and are available only to borrowers with good credit. Breakdown of sources of awarded financial aid 74% VERITAS UNIVERSITY Federal government grants, loans 17% College University 1876 4% grants and scholarships Private and 5% employer grants and scholarships ACADEMICS State government grants and scholarships eloan eloan.com Ш BUSINESS COLLEGE Copyright © 2012 E-LOAN, Inc. All rights reserved. Source: http://trends.collegeboard.org/downloads/Student_Aid_2011.pdf Source: http://trends.collegeboard.org/college_pricing Sources: http://studentaid.ed.gov/types/loans/subsidized-unsubsidized and http://trends.collegeboard.org/downloads/Student_Aid_2011.pdf source: http://www.statefarm.com/mutual-funds/start-planning/education-planning/cover529.asp OF DESIGN 2012 8007 2004 0007 9661 1992| ANN