Saving for College
Parents should expect to pay at least half to two-thirds of their children's college costs through a combination of savings, current income, and loans. Gift aid from the government, the colleges and universities, and private scholarships accounts for only about a third of total college costs.
NEW Changes in Policy and Treatment
The IRS has issued a special rule for 2009 that allows investments in section 529 college savings plans to be changed twice a year. Previously, investors could change the their investment strategy once a year and in certain other circumstances, such as a change of beneficiary or a rollover from one state plan to another. This change is effective only for 2009. Download IRS Notice 2009-01 (PDF) for visit the Internal Revenue Service site for more information.
529 Accounts and the FAFSA
- For a student who must report parental information, the accounts are reported as parental investments in question 92 on the Free Application for Federal Student Aid ("FAFSA"), including all accounts owned by the student and all accounts owned by the parents for any member of the household.
- Distributions from 529 Plans will be excluded from being counted as "other financial assistance" in determining the student's eligibility for other aid programs.
Explore your options using the links below:
- An Analysis of Section 529 College Savings and Pre-Paid Tuition Plans The Department of the Treasury released this report on September 9, 2009. It was prepared for the White House Task Force on Middle ClassWorking Families.
- FinAid: The Smart Student Guide to Financial Aid provides a comprehensive overview on the subject of saving for college costs
- U.S. Department of Education's Student Aid on the Web compares the costs and benefits of using different financing options
- College Savings Plan Network is a national non-profit association dedicated to making college more accessible and affordable for families. Their web site provides detailed information about 529 college savings plans and allows you to compare plans from around the country.
- Louisiana's START Savings Plan has been ranked the nation's top performing 529 college savings plan for 2007 in a recently released nationwide analysis. The study, conducted by Savingforcollege.com, analyzed the performance figures for all 529 plans across the country. Every state has at least one 529 plan available. The START Saving Program topped the charts in both categories measured: one-year performance and three-year performance.
- The Louisiana Office of Student Financial Assistance ("LOSFA") has created a series of short videos about the START Program.View them now .
- College Saving Foundation ("CSF") is a Washington, D.C.-based not-for-profit organization with the mission of helping American families achieve their education savings goals by working with public policy makers, media representatives and financial services industry executives in support of education savings programs
- The College Board is a not-for-profit membership association whose mission is to connect students to college success and opportunity. Founded in 1900, the association is composed of more than 5,400 schools, colleges, universities, and other educational organizations. Their web site includes adedicated page on college savings plans and financing options.
- CollegeAnswer, hosted by Sallie Mae, has comprehensive information on a number of major education savings plans.
- Introduction to Coverdell Education Savings Accounts
- Savings Bonds Round Out Education Savings
- Baccalaureate Bonds
- College Savings Vehicles Compared -prepared by the American Institute of Certified Public Accountants ("AICPA")
Additional media coverage
- Grading 529 College Savings Plans - from National Public Radio
- How Safe Is Your College Savings Account? - from U.S. News and World Reports
- Trying to Save for the Kids' College? It's A Bear - from The Wall Street Journal
Updated October 6, 2009