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The Federal government provides several attractive ways to help you fund your children's education. In this section we'll discuss:
- State-prepaid tuition plans
- 529 College Savings Plans
- Federal work-study programs
- Grants
State-prepaid tuition plans
Several states offer prepaid tuition plans that allow you to lock in the cost of sending your children to an in-state college at today's tuition rates. Here's how they work: - You must make either a lump sum payment or periodic payments to the state.
- The state then uses your money to pay for your children's in state tuition, guaranteed.
- If your child decides to go to school out of state, you'll get back your principal but at a nominal investment return.
- Some states that offer these plans include Alabama, Alaska, Colorado, Florida, Illinois, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nevada, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, and Wisconsin.
- To apply or for more information, visit the Web site for the Treasurer of your state.
529 College Savings Plans
529 college savings plans allow families to save for both in-state and out-of-state schools - Funds placed in a state-sponsored plan grow federally tax free.
- When the money is redeemed for college, the distribution is federally tax free as well.
- Monies remain in the account holder's name and can be moved from beneficiary to beneficiary.
These plans are a powerful tool. Our Financing Education class covers them entirely. Go there now to learn more, or to purchase a plan, please call 1-877-WFN-4YOU (936-4968).
Federal work-study programs
Work -study allows students to receive money during school while working part time. The school's financial aid office administers the programs offered at its institution. Here are two common examples: - The Americorps program allows participating students to fund their education in exchange for community service activity in underprivileged areas across the country. For more information, check out the Web site at www.cns.gov
- The U.S. military offers work-study opportunities in which students are given tuition and monthly allowance in exchange for military service after graduation.
Grants
Grants are another attractive financing option. With a grant, the funds awarded to recipients never have to be repaid. Two of the most common are: - Pell grants -- Pell Grants award low-income students up to $4050 each year. To apply, please call 1-800-4-FED-AID.
- Supplemental Educational Opportunity Grants (SEOG) grants -- Supplemental Educational Opportunity Grants (SEOG) award low-income students anywhere from $100 to $4000 each year. To apply, you'll need to contact the financial aid office of the school you or your child will be attending.
Continue to: Part VI- 529 College Savings Plans
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