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Navigational Keys
for College Funding
Dallas, Texas
(September 12, 2008)
Do you have one or more children who will start college in the next
one to two years? With school now in session across the country,
adjusting to the higher costs of living and recent layoffs and
foreclosures are challenging many students and parents. There are
several things that every parent and high school or college student
should know right now when paying for higher education. Michelle
Brodsky Goldstein, Principal, of Goldstein Financial Future and a
busy wife and mother and nationally recognized financial advisor
recommends the following tactics that all parents or students should
plan to have in place to provide for their educational future.
“If a family or individual student is
currently facing a financial shortfall such as loss of job, loss of
savings, or other financial hurdle, there are viable, short-term
solutions available to all to help remedy the situation,” said
Goldstein. “Currently, the national average costs for tuition, room
and board are $18,000 per year at a public university, $35,000 per
year for a regular private college, and $45,000 per year for an
elite or Ivy League college. At the current rate of inflation, that
cost increases by 7 percent per year.”
Goldstein offers three sources of
assistance for those experiencing shortfalls. By December, every
parent or student should fill out a Free Application for Federal
Student Aid (FAFSA) form which is available at
www.fafsa.ed.gov. You should never pay for this form and this
is the best way to put you in the system and “on the radar” for aid
consideration.
If you are a current college student,
you can also go to the financial aid department at your school to
discuss your extenuating circumstances. You may also approach the
department of your major to ask for what grant money (money that
does not have to be repaid) is available and to see if you are
eligible for any paid research or teaching positions through your
department’s work/study program. Work/study programs can provide
immediate cash for spending but that money cannot be applied towards
tuition.
When searching for financial aid, there
are five types of funding sources available:
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Student loans
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Parent loans
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Private scholarships and grants and
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Corporate aid.
For students, there are need-based
loans and grants. Of the need-based funds there are two types of
financial aid-Stafford unsubsidized and subsidized loans. Subsidized
is the preferred method because it means that the government pays
the interest for you while you are in school.
Parent loans for their undergraduate
students attending college are called PLUS loans and they are
sponsored by the Federal government. Scholarships can come from the
colleges themselves or from religious, ethnic, military or
local non-profit institutions like the Chamber of Commerce.
Corporate aid is also available on a case-by-case basis. Scholarship
options can be obtained from a certified financial planner or by
accessing www.fastweb.com, the
most trusted source for searching available scholarships. Goldstein
advises her clients that they should never pay for a scholarship
search.
She recommends that the more that you
apply for, the better are your results. Competition is fierce so a
student’s chances are improved by applying locally first.
For long-term planning with young
children, all parents need to know how to save for their child’s
college education and what vehicles are available. There are two
major types of savings plans. Parents should first set up a
Coverdell Educational Savings Account (ESA) where you can contribute
up to $2,000 per year per child and can be used for kindergarten
through graduate school expenses. ESAs can be invested in anything
from gas, gold, etc and all earnings are tax-free.
The other option is the 529 Plan where
parents can invest as much as $12,000 per year, per child, to be
used for college and graduate school expenses. There is a set
investment structure that your financial planner can advise you on.
What does college education planning
cost and how much time should I allocate per child? Goldstein
recommends budgeting to pay a financial planner one hour per child
for creating a short-term plan for a high school student and two to
three hours per child when planning for a long-term college savings
plan. Goldstein charges $150 for developing a short term college
savings plan for each child and up to $400 per child for developing
a long term plan. Goldstein added, “Every child should have access
to higher education and ample opportunity for financial aid; proper
planning can ensure this.”
Goldstein Financial
Future is a fee-only financial planning firm based in Dallas, Texas,
that offers life-cycle planning to individuals and retirement planning
for employers and employees. Michelle Brodsky Goldstein personally
advises clients on how to navigate through their financial future
whether they are readying for marriage,
a family or anticipating a major
life change of divorce or retirement. For employers and their employees,
Goldstein specializes in designing employee benefit and retirement
plans.
For more information or to schedule an appointment please call
214-361-6105 or go to www.goldsteinfinancialfuture.com
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