May 21, 2019Individual Investment Management

College Planning Basics
Important Facts to Know

What are some important planning tips?  
Read on...

1. The 529 Plan - Use It!
Want to save for college?  Do you have family that would like to gift money for school?  Would you like to do it in the most tax-efficient method possible?  You need to open a 529 plan immediately!  These tax advantaged plans allow for tax free investment growth and tax-free withdrawal of funds if used for education purposes.  If one child doesn't attend school, you may transfer to another child.  Large deposit limits are also another benefit.  Each state runs their own program and you are free to use anyone that you wish.  Be aware that some states have tax credits for deposit based on your income.  While there is no federal credit or deduction for a 529, they are well worth the time.  This author prefers Vanguard but there are many good programs out there.   A good intro to 529 plans can be found here.

2.  Know Your Timelines!
Most colleges have a due date between Jan 1st & Feb 1st for regular decisions.  Below are the other most common application types and deadlines.  A good read on this can be found at the following blog here.  Another interesting read this author found on timelines to understand for students can be found at this blog link here:

 * Early Action: ("I like your school.")
You want an early answer but are not promising to attend if accepted.  You are telling them they are on the short list of your choices.
Deadline: Usually 11/1 - 11/15

* Early Decision("I love your school.")
You want an early answer and will attend if accepted.  If accepted, you will withdraw your other applications and attend immediately the next year.
Deadline: Usually 11/1 - 11/15

* Rolling Admission: ("You're on my list.")
This indicates you like the school, but may move them higher up the chain based on how quickly they get back to you.  Some schools do have a deadline, but the dates depend on the school - usually spring through fall.    

3.  You & Your Brand.
Have you set up a separate email address to organize communications with these schools?  Do you have a personal website or video channel that you may wish to take down temporarily, so it is not factored in?  Is there anything on the web or your Facebook page that may be wise to remove?  Don't think for one-minute schools don't consider this.  You must treat this as if you are applying for employment as a student - take care to nurture your brand!

4.  Understand financial aid.
Don't assume you won't qualify.  A good first step is to calculate your "Expected Family Contribution" (EFC).  The EFC is an estimate of what your family may be asked to contribute to college.  That can be found here:  FAFSA Link  
Full time students are considered first for aid, and you are encouraged to investigate work-study programs as well as grant programs through the college directly.  Roughly 40% of all students at many schools around the country receive some kind of aid.