Here are some points to use in presenting the topic:
Planning for college early on is an increasingly important issue for families.
College costs annually rise at a percentage faster than federal and state grant money can currently parallel.
Parents should have information on saving for college, very basic financial aid information and have knowledge of Web resources available.
One of the most difficult tasks today is to get parents and their children to think about something as far off into the future as going to college.
Most parents and students don’t think about college until the junior or senior year in high school which is often too late.
Early awareness initiatives take a creative and educational approach to introducing the concept of going to college to families who may not feel that going to college is possible.
By going to college a student enjoys several benefits including:
Employability
Personal Goals
Education
Let’s take a look at each specifically.
While most of the emphasis on selecting a college takes place in the junior and senior high school years, families need to begin planning very early in their children's lives to meet both financial and academic goals. Families that plan ahead and save wisely will help make college a reality for their children.
First, we will discuss what students and parents should do for academic planning.
Then we will talk about financial preparation.
Academic planning begins as early as elementary school. A motivated student begins with the parent and student working together to foster good study habits.
During the younger years of school, students need to develop the desire to persist and follow through in their studies. Here are some examples of how to do this:
Elementary students need to complete all homework, long-term projects, study hard, read, develop good study habits, and ask for help.
Elementary students should spend extra time in activities which further develop their skills, talents or interests.
Middle school students should take classes in language arts, math, science and social studies that will challenge them and prepare them for high school.
Middle school students should further develop their skill sets.
Mapping Your Future is a Web site that is available to help plan for college.
It is dedicated to sharing information with parents, students and counselors about financial aid and academic planning for college, specifically at a younger age - usually middle school. The Web address is www.mapping-your-future.org.
Careership is a feature that maps out specific careers in which younger students may be interested. As the student boards the Careership towards a specific profession, the program presents to the student a path to follow with courses required, extracurricular activities recommended, organizations to join, jobs and other activities that specifically relate to the profession that will allow a student to be on the correct path for that career. And it’s fun!
The cost of postsecondary education continues to increase, about 4-6% annually on average; making it essential to start saving early.
Many families do not plan far enough in advance for the expenses of higher education. The cost of postsecondary education continues to increase, making some type of an early savings plan essential. The earlier families begin saving, the longer their money can work for them.
If your child will attend a 4-year private college in the year 2013, it will cost more than $58,000 per year.
Financial aid received helps determine what a family’s final cost is at each school.
There are several sources that help identify specifically how much a college education will cost at a specific school in the future to help prepare you for how much money to save. One such source is the "College Costs and Savings Calculator" at Collegezone.com.
Financial Planning - begin with an understanding of the cost of a postsecondary education. Costs have been steadily rising over the past decade and the trend is expected to continue. Securing funds to meet these costs is a critical step to continuing education beyond high school. Families should not expect financial assistance to provide all necessary funds for the expenses of the education.
He or she should be licensed.
Obtain the names of several prospective planners from trusted sources such as business colleagues or friends. From these references, interview the prospective planners.
Get background information such as education, experience, and business affiliations.
Some planners specialize in certain areas of expertise, such as investment, employee benefit, retirement planning, insurance, tax, and estate planning strategies.
Determine how the planner expects to be compensated. There’s a big difference between a commission and an hourly rate.
Develop a rapport with the planner that you choose. Trust is one of the major factors in choosing your planner.
Paying before college means that the family has saved the necessary funds to cover the cost of education. Parents’ savings and investments are the primary source.
Student’s savings and investments are an additional source to pay for college.
Prepaid tuition programs such as College Illinois! which will be discussed momentarily, is an easy way to save for college.
College Savings Bonds can be purchased and redeemed at the time of college. Families are eligible for the Bonus Incentive Grant of $15 to $440 per bond when more than 70% of the bond is used for education.
Before families begin saving, they may want to get a professional evaluation of their economic situation and savings goals. Here are some of the more popular available savings options for education:
Certificates of Deposit (CD); Common stock; Corporate and Municipal bonds; Education IRA; Mutual funds; Passbook Savings Accounts; Tax-deferred annuities; U.S. Savings Bonds; Zero-coupon bonds; and Variable Life Insurance.
For example, here is how much money you would need to save per week at three different interest rates to save $30,000.
Using this example, compared with the rising costs of tuition, it is important to create a sound financial plan to pay for college, and the earlier the family starts the better.
College Illinois! - a prepaid tuition program. With College Illinois! you lock in your cost today with a College Illinois! plan to avoid tuition inflation. College Illinois! pays full in-state undergraduate tuition and mandatory fees at public universities or community colleges in Illinois.
Benefits may also be applied toward tuition and fees at most Illinois private colleges, as well as colleges and universities throughout the country.
Up to nine semesters may be purchased through a variety of plans and payment options.
Purchase contracts of up to nine semesters in three ways:
lump sum, payment plan, deposit with payments
For more information, visit www.collegeillinois.com or call toll free 877-877-3724.
Your money is Illinois state tax free at the time it is used and also federally tax exempt.
Beginning in calendar year 2005, individuals subject to Illinois state income tax can deduct from their taxable income up to a maximum of $10,000 per year for contributions made toward the purchase of any College Illinois! prepaid tuition contract. Married couples filing jointly can deduct up to $20,000 per year.* This state tax deduction reduces the individuals' adjusted gross income (AGI) by the amount contributed up to $10,000 (or $20,000 for those filing jointly). The Illinois state tax deduction is applicable to 2005 taxes, payable in 2006, and remains in effect each year thereafter. Sign up by completing an application, by mail or by completing an application on line.
Transferable to other family members.
Talking Points:
Thank you for coming to the presentation.
Remember, if at anytime if you have any questions, please visit College Zone.com or call 800-899-ISAC (4722)