How to fund a college education

Alsky · 06-24-2007, 02:32 AM

Any good ideas, companies and plans on how to fund a college education.

Of course a life insurance policy is a good start in the event of a pre-mature death, but any other ideas on a systematic plan and a good company to achieve this with?

Are the SECTION 529 SAVINGS PLANS the best thing going now or can someone suggest a better plan or other ideas using insurance. Thanks, Al

bluemarlin08 · 06-24-2007, 09:56 AM

The best plan is to have a well educated child that has a high GPA and scores high on ACT and SAT and takes advanced courses in high school. If they do this they will more than likely get full scholarships, mine have, have one starting college this fall, full ride.

CHUMPS FROM OXFORD · 06-24-2007, 10:41 AM

529. Not tax-deferred, but tax-free. Exempt from State taxes as well if you use your State plan. Easily transferable.

Plenty of funding options. Fees aren't like a Vanguard account, but still the best option out there.

zackarychapple · 06-24-2007, 09:54 PM

Apart from the kid needing to get a good act and good gpa, money is important, nothing is worse then having a bunch of money put away in a 529 or a CD and going to apply for financial aid or scholarships and they look at how much money you actually have. What most people don't realize is that the money in your 529 and your savings, checking, and yes CD's count against you on the FAFSA, best place for that money, cash value life, UL's or EIUL's they don't show up on the FAFSA app.

Zack

trvlnut · 06-25-2007, 12:15 AM

Check out this link. They go over everything..even permanent insurance.

http://www.savingforcollege.com/

salpro22 · 06-25-2007, 12:30 AM

Quote:

Originally Posted by Alsky

Any good ideas, companies and plans on how to fund a college education.

Of course a life insurance policy is a good start in the event of a pre-mature death, but any other ideas on a systematic plan and a good company to achieve this with?

Are the SECTION 529 SAVINGS PLANS the best thing going now or can someone suggest a better plan or other ideas using insurance. Thanks, Al

I recommend Military Insurance. Devote 2-4 years of your life to a trade you are interested in and get enough money via a GI Bill to get a few degrees. Use financial aid for the rest and take your time paying it off at the 2-3% current interest rate.........

Alsky · 06-25-2007, 12:53 AM

Quote:

Originally Posted by zackarychapple

Apart from the kid needing to get a good act and good gpa, money is important, nothing is worse then having a bunch of money put away in a 529 or a CD and going to apply for financial aid or scholarships and they look at how much money you actually have. What most people don't realize is that the money in your 529 and your savings, checking, and yes CD's count against you on the FAFSA, best place for that money, cash value life, UL's or EIUL's they don't show up on the FAFSA app.

Zack

This is a grandparent wanting to contribute to her grandsons college ed so the cash in the 529 will not jeapordize future scholarships... but you are absolutely correct if this was a parent saving for the childs education.

Im thinking that a 529 is the best way for her to go even though I will give up a commision for an insurance sale by advising her to do the 529. I just dont see how a UL is going to accumulate enough cash unless she dies before the kid needs the funds for school. She has been rated up on a prior life policy she has purchased from me, so the cost may be prohibitive as well.

Thanks,
Al

djs · 06-25-2007, 12:57 AM

Quote:

Originally Posted by Alsky

I just dont see how a UL is going to accumulate enough cash unless she dies before the kid needs the funds for school. She has been rated up on a prior life policy she has purchased from me, so the cost may be prohibitive as well.

Thanks,
Al

Place the UL on the child, not the adult. You can then overfund it to build value. If you're not able to write the 529, I assume you can't write the VUL either though. Of course, the 529 is a much better way to go.

Dan

CHUMPS FROM OXFORD · 06-25-2007, 01:12 AM

I rarely recommend a life insurance policy to fund college education. It rarely makes sense. C'mon. A policy that pays 55%-95% FYC is not going to be liquid in the early years.

Stick to 529s or certain trusts.

CHUMPS FROM OXFORD · 06-25-2007, 01:14 AM

"Im thinking that a 529 is the best way for her to go even though I will give up a commision for an insurance sale by advising her to do the 529."

That's a strange statement.

bluemarlin08 · 06-25-2007, 08:30 AM

Place the UL on the child, not the adult. You can then overfund it to build value.

Why do you think that is a better funding strategy than investing in equities?
What is the projected return at the time the kid starts to withdraw to go to school?

healthagent · 06-25-2007, 08:41 AM

There are also colleges that will allow you to lock in at today's tuition rates.

djs · 06-25-2007, 10:30 AM

Quote:

Originally Posted by bluemarlin08

Place the UL on the child, not the adult. You can then overfund it to build value.

Why do you think that is a better funding strategy than investing in equities?
What is the projected return at the time the kid starts to withdraw to go to school?

Again, I highly recommend the 529 over any form of life insurance or pure equity play for college funding.

The answer to your question though is taxes. You don't need a lot of life insurance on a child, but as long as you stay within TAMRA guidelines, you can overfund a policy to get the cash value to build faster. This is not the best way to work solely towards a college education, but it is one way.

Taxes is the same answer as to why the 529 is is the better vehicle for college funding than pure equities.

Dan

healthagent · 06-25-2007, 10:38 AM

Quote:

Originally Posted by salpro22

I recommend Military Insurance. Devote 2-4 years of your life to a trade you are interested in and get enough money via a GI Bill to get a few degrees. Use financial aid for the rest and take your time paying it off at the 2-3% current interest rate.........

I'm sure there are a lot of troops in Iraq who just joined for the college benefits. I think some may be re-thinking that decision.

It worked out for me. I did 4 years and got the GI bill which paid for all 4 years at Towson State. I was 12 credit shy of graduating with a degree in sociology and got a summer sales job. 2 weeks before going back for my last semester they offered me a management position in LA for $60,000. I never looked back. Still 12 credits shy.

salpro22 · 06-25-2007, 11:05 AM

Selling what in LA?

healthagent · 06-25-2007, 11:09 AM

I worked for a company called "wholesale warehousing" (now called DX Max) and we went B to B selling toys. I "owned" one of the offices. Very lucrative if you don't mind 14 hour days 6 days a week.

LGilmore · 06-26-2007, 09:21 PM

If there's alot of time, the best is still permanent life..... I know I know... However, when I filled out the FAFSA for my kids college, they don't ask for cash values. 529's, coverdales are fine but don't work in every situation and you have to declare them.

If you're talking to someone whose kids are a couple years away from school a cookie jar is about as good as any. I guess the key to the situation is time before needed (growth), tax status and reporting status.
Lead Time creates more choices.

Oh, the days of 2-3% interest are long gone. Thanks Gw. Son just sign medschool loans at 8%. Undergrad is around 7% now. Four years ago 2.9% then.... Thank god for scholarships.