Comments on: College Savings Accounts for a Bad Economy http://moneysmartlife.com/college-savings-accounts-for-a-bad-economy/ Money Tips for a Better Life Tue, 16 Mar 2010 14:33:14 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: Carnival of Personal Finance #230 – New Site Edition - Canadian Finance Blog http://moneysmartlife.com/college-savings-accounts-for-a-bad-economy/comment-page-1/#comment-166375 Carnival of Personal Finance #230 – New Site Edition - Canadian Finance Blog Mon, 16 Nov 2009 15:44:47 +0000 http://moneysmartlife.com/?p=2623#comment-166375 [...] Ben from Money Smart Life presents College Savings Accounts for a Bad Economy. [...] [...] Ben from Money Smart Life presents College Savings Accounts for a Bad Economy. [...]

]]> By: Seth http://moneysmartlife.com/college-savings-accounts-for-a-bad-economy/comment-page-1/#comment-166087 Seth Thu, 12 Nov 2009 16:57:43 +0000 http://moneysmartlife.com/?p=2623#comment-166087 Lee, A whole life policy has a few advantages for college savings. Whole life policies pay a steady dividend which depending on the carrier may fall in the 7% range. Remember this is tax free growth that can be borrowed from to pay school expenses. Market fluctuations can have a huge impact on 529 plan depending on timing and allocation. The other strength of a whole life policy for this situation is that its cash balance is not considered by FAFSA (the process by which financial aid need is calculated). 529 plan values are required to be included on the FAFSA form. This WILL effect if and for how much financial aid you would be eligible for. Whole Life policies are front loaded by the insurance companies. Because of this cash value remains low in the early years. This solution works best for parents with very young children in order to give the policy time to accumulate a sizable cash value. On another note because the money won't be needed until after college to repay federal aid loans, the funds will have additional years available for growth. Lee,
A whole life policy has a few advantages for college savings. Whole life policies pay a steady dividend which depending on the carrier may fall in the 7% range. Remember this is tax free growth that can be borrowed from to pay school expenses. Market fluctuations can have a huge impact on 529 plan depending on timing and allocation.

The other strength of a whole life policy for this situation is that its cash balance is not considered by FAFSA (the process by which financial aid need is calculated). 529 plan values are required to be included on the FAFSA form. This WILL effect if and for how much financial aid you would be eligible for.

Whole Life policies are front loaded by the insurance companies. Because of this cash value remains low in the early years. This solution works best for parents with very young children in order to give the policy time to accumulate a sizable cash value.

On another note because the money won’t be needed until after college to repay federal aid loans, the funds will have additional years available for growth.

]]> By: Erik http://moneysmartlife.com/college-savings-accounts-for-a-bad-economy/comment-page-1/#comment-165751 Erik Sat, 07 Nov 2009 03:40:21 +0000 http://moneysmartlife.com/?p=2623#comment-165751 I like the idea about buying real estate as a college savings plan, but I think you should be careful with that. This option should only be for wealthier parents that can afford real estate investments that won't kill their finances if they don't have renters in them for a few months. I like the idea about buying real estate as a college savings plan, but I think you should be careful with that. This option should only be for wealthier parents that can afford real estate investments that won’t kill their finances if they don’t have renters in them for a few months.

]]> By: Pam http://moneysmartlife.com/college-savings-accounts-for-a-bad-economy/comment-page-1/#comment-165716 Pam Fri, 06 Nov 2009 17:33:18 +0000 http://moneysmartlife.com/?p=2623#comment-165716 Right now, it is difficult to save money in a separate account for your child's future college tuition because there are other finance consuming things that need to be taken care of first like the mortgage payment and the electric bill. Seeking alternative methods like living at home while attending community college is a definite way to save some money during those expensive college years and that was what I did. After transferring, I only owed half the debt of those who attended the University for 4 years. Upromise.com sounds great! Right now, it is difficult to save money in a separate account for your child’s future college tuition because there are other finance consuming things that need to be taken care of first like the mortgage payment and the electric bill. Seeking alternative methods like living at home while attending community college is a definite way to save some money during those expensive college years and that was what I did. After transferring, I only owed half the debt of those who attended the University for 4 years. Upromise.com sounds great!

]]> By: Lee http://moneysmartlife.com/college-savings-accounts-for-a-bad-economy/comment-page-1/#comment-165714 Lee Fri, 06 Nov 2009 15:23:53 +0000 http://moneysmartlife.com/?p=2623#comment-165714 Can someone help me understand why a whole life insurance policy is better than a 529 plan for college financing? Can someone help me understand why a whole life insurance policy is better than a 529 plan for college financing?

]]> By: Sam http://moneysmartlife.com/college-savings-accounts-for-a-bad-economy/comment-page-1/#comment-165692 Sam Thu, 05 Nov 2009 19:57:54 +0000 http://moneysmartlife.com/?p=2623#comment-165692 Upromise.com sounds like a really great way to save money for a college education for one's child over the years. With the cost of college rising each year, it's becoming much harder to have those much needed funds available when it's time. . I think programs such as Upromise.com are a nice and creative way to save money for college without having to put forth too much effort. Upromise.com sounds like a really great way to save money for a college education for one’s child over the years. With the cost of college rising each year, it’s becoming much harder to have those much needed funds available when it’s time. . I think programs such as Upromise.com are a nice and creative way to save money for college without having to put forth too much effort.

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