WGN Morning News: Matthew Sapaula talks Cash for College during Money Smart Week
As of Monday, April 19th, 2010, the Illinois Student Assistance Commission (ISAC) has suspended all aid to applicants seeking Illinois public college financial aid. According to the ISAC, they have seen a huge increase in the number of applicants this year due to students and parents seeking greater financial aid from the government. The amount of aid being applied for cannot be supported, at this time, by the budget given to the ISAC from the Illinois government.
Many families have felt the nasty bite of the economy eroding their savings and investments, i.e. 401(k)s, Illinois 529 Bright Start College Savings Plans, Coverdell IRAs, brokerage accounts, home equity or real estate investments, that were earmarked for college. Through the recession, these balances are no longer close to an amount they hoped would be there. Speaking to some families who have pre-teen, teenage students still in junior high and high school, there isn’t much hope in the sounds of their voice. The impact of the economy has caused the financial dreams and hopes of paying off debt, helping their kid’s through college and nearing financial independence…now a wishful thought.
Personally, I’m not going to give into the doom and gloom…I see happy, fulfilled, successful people on a daily basis not involved in this recession both emotionally and financially. There are positive choices out there and you DO have options…
Here are a few points within this segment:
Newborns today will need $180,000 for their college education – Can you say abstinence during marriage anyone? Didn’t think so. Even more the reason to discuss college planning alongside your own financial plan, hand in hand. As we all know, time FLIES by. Before you know it, your kid is a senior in high school. By then, you’re way behind the power curve in getting your ducks in a row with college applications, financial aid offices and grants that can save you tons o’ cash!
529 College Savings Plans aren’t the only game in town – They are just one of the best marketed in the media. But there are many ways to pay for college. Money for college comes from three main areas – the federal/state government, colleges themselves and of course, your own pocket. Financial vehicles such as Roth IRAs, cash value life insurance and annuities are viewed differently by colleges than money left in bank CDs, non-retirement plan brokerage accounts and equity within real estate investments. In other words having your money in the wrong financial vehicle and improperly titled can increase your expected family contribution (EFC) forcing you to dig deeper for Sonny’s college education. Positioning and titling your financial assets properly can save you from shelling out more money, heartache from being limited to very few choices for higher education and unnecessary risk from a down economy.
Negotiate Your Financial Aid Offer – “Less than 10% of families actually appeal and negotiate the financial aid that is awarded them,” says John Belles of College Funding Solutions, the nation’s most recognized college planning service. That means 90% of all families don’t even realize this can be done but lose out on additional cash-for-college opportunities had they not asked.
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