Free College Money

Your College Financial Options

It’s pretty scary when you are leaving for college for the first time, but it can be even more scary when you look at the price it’s going to cost you.  The good news is that there are many ways you can find your college education if you are willing to do your research and take the time to fill out the necessary applications.  Even if you have not saved for your college education for years, you can still go to college and find a loan that will help you get through the next few years.  Here is a look at your college loan options for the future.

The Perkins Loan: Anyone who has done any research on college loans have probably heard of the Perkins loan.  Just to make it that little bit more confusing it goes by the names of “Formerly National Defense Student Loan”, the “Perkins Loan Program” and the “National Direct Student Loan”. This type of loan is based on need and is a low interest loan to help you finance your college education.  Fortunately if you qualify for a Perkins loan there are over 1800 participating colleges that will take the Perkins loan.  This gives you plenty of opportunity to find a college that fits your needs.  If you are interested in taking out a needs-based college education among such as the Perkins loan, then you need to make sure that you qualify, you can do this by going online in learning more about this particular loan or speaking to your college education counselor about this loan.

Federal GRAD Plus Loan: This loan is for graduate students who are in need of financing for their graduate school studies.  This one is also a needs-based loan and offers a low interest repayment after you have graduated. In order to qualify for this loan, you must be a citizen of the United States or an eligible non-citizen.  You also must be a student in a graduate or professional program and enrolled for at least half of the time.  Currently this loan has a fixed interest rate of 8.5%.  The amount of money that you will get when you apply for this loan will depend on your financial situation and may vary from student to student. Although you will not be responsible for repayment while you are in school, this loan does accrue interest.  Ultimately, after you have graduated, you will be responsible for the total amount plus any interest accrued whilst at school.

Subsidized Stafford Loan: this loan is available to United States citizens or eligible non-citizens who are enrolled in a college program or professional program for at least half of the time.  The amount of loan that you will receive will again depend on your financial situation.  Not everybody can qualify for this type of loan and the amount of monies that you will receive with this loan is $3500 for the first year, $4500 for the second year, and for your third through fifth year in school, you can get $5500. If you are a graduate student and you qualify for this loan, you can get $8500. The interest rate on this loan is currently fixed at 6.8%. In addition, it is important to remember that your repayment schedule begins six months after you graduate or, if your school enrollment drops below half-time.  You do have up to 10 years to repay this loan and extensions are granted in certain situations.  There are a variety of ways to pay back this type of school loan.  So you should check with your loan officer or the Internet for information about this very popular college education loan.

Are you aware that you don’t necessarily have to stick with your own state 529 College Plan? Many states will let you use their plan even if you don’t live there. Of course some won’t so check to make sure before you invest any money. But it certainly pays to shop around. When you are talking about savings plans for college there is no single plan that has everything that you want. Each state plan has advantages and disadvantages. Some states are better overall. If you feel that you are good at investing, then most states will let you specifically choose which accounts you can invest in.

If, like most people, you have no experience in investing, it’s usually best left up to the experts. So, which states have the best plans? Obviously it depends where you looking and what you want out of them. For instance if you were wanting to save money on fees, your best bet would be to go with the Utah Educational Savings Plan Trust. This plan has a portfolio of nine-index funds that charge only 0.38% per year in fees. This plan also only charges 4.00 per 1,000 of your account balance. If you’re looking to save money on fees then this is a great option. Add in the tax breaks that you may be eligible for and this plan is perfect for low fees.

If you would prefer to stay conservative, the Michigan state plan will definitely help keep your mind at bay. The Michigan Educational Savings program is perfect for the investor who is unsure about risking their money in the stock market. This plan has a savings option that guarantees the principal and a minimum annual interest rate based on a treasury note. This plan is titled more towards bond funds than most 529 plans. Bond funds are traditionally much more stable than the stock market. This plan also has low fees that make it ideal for the investor who doesn’t like to take a lot of chances with his money.

Arguably the best “all-round” plan belongs to the state of Virginia. If you feel comfortable placing your trust in an advisor then this is the plan for you. The Virginia College America Plan will cost you more when using an advisor, but in the long run it could be worth it. They will craft a portfolio with 22 top-notch funds from American Funds. The advantage of using this plan is that it is easy to set and forget. When you have less time on your hands this is a plan that you can sit back and watch your investment grow.

As you can see there is no straight out answer for choosing a 529 College Plan, it is very dependant on your individual circumstances. Many states have great plans in place while others are not so good. It depends a lot on what kind of plan you are looking for and how you would like the money invested. Some investors choose to take the stock market while others love the bonds and mutual funds. Each plan has its pluses and minuses just like anything else. There are other important considerations that you need to take into account such as taxes. Just make sure you shop around as each state is competing to get more customers and they are constantly updating their plans.

529 college plans vary greatly so take your time and do your research into which state fits your needs the best. After you are done you will probably find out more than one state will do the job for you. You might also want to check out other creative ways to get money for college.

What happens to your Independent 529 College Plan if your son or daughter is not accepted into any of the participating colleges? Fortunately you still have options. You could roll your independent 529 plan over into a state sponsored 529 plan. You could change the beneficiary to another child. Or you could get a refund and still take advantage of the tax breaks if you use the money for other higher education expenses. It is important to note that any withdrawals used for items other than higher education will be taxed. The same options apply if your child gets a scholarship to the school.

The new schools that join the plan will honor the certificates from the current owners. And if a college ever terminates the plan, they will continue to honor the certificates that were sold during and before the time they were involved.

The great thing about independent 529 programs is that you can enroll at anytime and add monies to your account at anytime. You can contribute as little as $25 a month as long as you reach a minimum of $500 in two years. There are no annual fees, entry fees or exit fees. The member colleges pay for the annual management fee so all of your monies go to tuition. And best of all, it is federal tax-free. The rise in value between the original purchase and the amount of tuition that it is redeemed for is tax-free.

If you are thinking of a private college for your child, have a look at the list of participating independent 529 plans. This is one of the best ways save on tuition. Of course an even better way is to get someone else to pay! Check out the details at Free College Money.

Let’s explore the independent 529-college plan. Basically it is a program designed to avoid the rampant inflation of college tuition. With this plan you can actually lock in the current price of today’s tuition that your child can later use at any member college.

Here’s how the independent 529-college plan can work for your family. Say that you purchase half a year of tuition for your child today. The member colleges carry the risk and you are protected from future tuition increases. The tuition rate that you just paid is absolutely locked in no matter how much the tuition rises. So you invest $5,000 this year for your son who is due to start college in 15 years from now. If he attends a college that’s an independent 529 member, the plan will look up what the college was charging the year that you made your deposit. Say that it was $20,000; you have credit for 25% of one year’s tuition no matter what the school is charging in 2022. By prepaying, you’ve just saved $20,000 tax-free. You may be paying in excess of 50% less tuition than someone who is not participating in the independent 529-college plan.

This only works if your child goes to a college that is a member of the plan. The amount you save is in relationship to the amount you prepay, but even a small payment can go a long ways towards saving on college. It’s important to note that the independent 529 money only covers undergraduate tuition and mandatory fees. There’s no provision for the room, board, books or supplies like the other 529 plans do. This may or may not be changed by the time your child attends college.

Each member college also offers a special tuition discount so you’re not only saving on tomorrow’s rates, but you’re actually getting a better deal than today’s prices. Each college sets their own discount rates. There are over 260 colleges participating in the independent 529 plan today. Take a look, some of the finest colleges and universities are among the participants.