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Your Child’s College Education Savings Plan, Discover 4 Great
0With higher education costs increasing at double digit
percentages an effective college savings plan for your kid’s
education is becoming much more critical. Most parents will find
that their kid’s future college costs will be much more than
they have planned. This leaves many kids to be faced with
obtaining financial aid to compensate for a portion of their
higher education costs. This article will explore the pros and
cons of 4 common college savings options. This article will also
seek to show which of these 4 options are a better option if
part of your kid’s higher education costs are to be funded by
financial aid.
529 College Savings Plan: Since January 2002, 529 college
savings plan have become a new option for achieving tax free
college savings. These plans are state sponsored investment
programs that offer special tax treatment. It allows just about
everyone to save for their kid’s college education. While there
are many benefits of a 529 college savings plan, perhaps the
most important is that your investment earnings are tax deferred
if you use the funds for qualified education expenses.
Additionally, another big advantage is that the maximum amount
you can contribute to a 529 savings plan can go as high as
hundreds of thousand dollars but be aware these are based on
your States specific guidelines. If for some reason you do not
use the investment funds for college, you can still withdrawal
your investment earnings, but you will have to pay a federal
penalty of 10% and federal income taxes on your earnings. The
penalty can be waived if your child receives a college
scholarship, or in the event your child becomes disable or
dies.
A 529 plan can typically be easily purchased through an
investment broker or mutual fund company like Vanguard or
Fidelity. Please be aware that one of the biggest disadvantages
of a 529 plan is that investment options can sometimes be
limited. However, as 529 plans become more popular it is likely
that more plan options will open. For instance, the State of
Ohio just announced the option for bank CDs and saving accounts
for 529 plans. One last main advantage of a 529 college savings
plan is that the money in the plan is classified as a parents
assets so less that 6% of the value counts against your kid’s
eligibility for financial aid.
Coverdell Education Savings Account (CESA) (formerly known as an
Educational IRA): A Coverdell Education Savings Account is a
savings account created as an incentive to help parents and
students save for higher education expenses. A Coverdell
Education Savings Account is easy to set up at most financial
institutions and banks. A Coverdell Education Savings Account is
similar to a 529 college savings plan, but different in the
contribution limits. With a Coverdell Education Savings Account
you can only contribute $2000 per child per year and to qualify
your adjusted gross income must be less than $110,000 if you are
single and less than $220,000 if you are married filing jointly.
For financial aid eligibility a Coverdell Education Savings
Account is classified as a parent’s asset so less that 6% of the
value counts against your kid’s financial aid eligibility.
UGMA/UTA Custodial Account (Uniform Gifts to Minors Act/Uniform
Transfers to Minors Act): A UGMA/UTMA account allows someone to
make gifts to a minor without setting up a trust. While there
are benefits to a UGMA/UTMA account the first limitation is that
these types of accounts offer very little federal tax advantage.
Secondly if your child is 14 or under only the first $800 of
income is tax free, the next $800 is taxed at your child’s tax
rate and after that there is no tax benefit at all. The other
big disadvantage is that an UGMA/UTA Custodial Account has to be
set up in your child’s name. This can create a big problem if
your child needs financial aid since all of the assets will be
reviewed at a 35% rate. As a result, a UGMA/UTA Custodial
Account is not advisable for those who may need to qualify for
financial aid eligibility.
The main advantage of a UGMA/UTA Custodial Account is that there
is no limit on the investment contribution and it is very easy
to set up at most major financial institutions including some
insurance companies. However, as can be seen above the
disadvantages of a UGMA/UTA Custodial Account far outweigh the
benefits.
Taxable Investment Accounts: Taxable investment accounts can be
a broker account, a mutual fund, a certificate of deposit or
just a regular savings account. Essentially it is just a regular
account that earns taxable interest, or investment income. A
benefit of a taxable investment account if set up in the parents
name is that the assets are classified as a parent’s asset so
they do not count as a negative in the financial aid formula.
Additionally, taxable investment accounts offer lots of
flexibility, and are easy to set up at any financial
institution. However, the big limitation to taxable accounts in
saving for college is that they offer no tax advantage for
college savings.
In summary, a solid savings plan for college is a very important
undertaking for parents to consider. The above 4 education
investment options can be highly useful in the college planning
process. Furthermore since some of these investments offer
substantial federal tax advantages and do not count against
financial aid eligibility they can maximize parent’s investment
resources.
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What Makes a Top University?
0607 days
by admin
in University
A number of assessments carried out by AllAboutUni.com indicate that the general characteristics of a top university are the following: being based in North America or Europe, being in an area where other top universities are clustered, having a large endowment and being a private institution. AllAboutUni.com is an independent, global and interactive website where visitors can obtain information about universities (global rankings, student reviews, university news and campus pictures).
The analysis is based on a ranking of the World’s Top-500 Universities produced by the Institute of Higher Education at the Shanghai Jiao Tong University. Several indicators of academic or research performance are used to establish the ranking, these include staff winning Nobel Prizes, highly cited researchers and articles indexed in major citation indices. The rankings have been published since 2003, with the 2008 ranking published on 15 August 2008.
Location An AllAboutUni.com assessment found that the World’s Top-500 universities are mainly located in Europe (n=210; 40%) and the Americas (n=190; 40%). In the Americas, 95% of the universities are located in the United States (84%; n=159) and Canada (11%; n=21).
Clustering An AllAboutUni.com assessment found that in both the United States (US) and Europe there is a clustering of the world’s top universities. In the US, 36% (57 out of 159) of universities – more than one in three – are located in just five States: New York (15), California (13), Texas (13), Massachusetts (9) and Pennsylvania (7). In Europe, more than one in three (36%) of the Top-25 universities are located in United Kingdom.
Public – Private An AllAboutUni.com assessment found that 70% of the World’s Top-10 universities are private institutions, suggesting that at the very top of the rankings private universities perform better than public universities (click here). In the World’s Top-25 universities, there is a lower predominance of private universities, with 11 out of 25 universities being private.
Endowment An AllAboutUni.com assessment found that the World’s Top-25 universities have accumulated a massive amount of endowment wealth (a total of $170 billion) and the private universities in the US have accumulated more wealth than the public universities. A large university endowment supports the operating budget of a university (for example, a third of Harvard University’s operating budget comes from endowment income).
Age An AllAboutUni.com assessment found that the age of a university was not associated with being in the World’s Top-25 universities (click here). Two good examples of ‘young’ universities achieving a high ranking are Stanford University (established in 1891 and ranked 2nd) and the University of California – San Diego (established in 1960 and ranked 14th).
Other factors Other factors that will determine the ranking of a university include: the university infrastructure (campus, facilities, etc.), the working conditions (academic salaries, academic freedom, etc.), the levels of funding (public and private funding) and the quality of life in the region where the university is located. Conclusion A series of AllAboutUni.com assessments has identified a number of general characteristics that help make a top university. The very strong performance of private universities in the World’s Top-10 universities (7 out of 10) suggests that private universities are better able manage the different factors and etablish a top university.
More Ways To Use The Taxation System To Pay College Education Costs
0In addition to Education IRAs and federal tax credits there are
many other ways to use the taxation system to pay for the high
and increasing costs of a college education. You need to
consider all of these tax benefits in order to ensure that you
can benefit from this form of government support to families who
are helping their kids get a higher education.
Some of the other ways to let the taxation system pay for some
of your family’s college education expenses include deductible
expenses, Section 529 plans, regular IRA’s, savings bonds,
investing on your child’s behalf, and putting your child to work
for you.
You can deduct up to $4,000 a year in qualified educational
expenses but you can’t combine a deduction and a tax credit for
the same student in the same year. You can however split the
deduction and the credit if you have more than one child who
qualifies.
Many people also contribute money to Section 529 plans which are
named after the section of the IRS code that regulates these
plans You can also put money into so-called Section 529 plans.
Section 529 plans are regulated by the states that hire an asset
management company to look after the business side. You can
contribute to these plans for future college education and the
earnings added to the funds are tax-free.
You can now also use your regular IRA penalty-free if you want
to use some of it pay for qualified educational expenses. You
can deduct up to $2,500 in interest paid for educational loans
as an above-the-line deduction. Like many other deductions these
benefits are not available to single, or dual high-income
earners.
But perhaps the easiest way to get taxation monies working for
your child’s college education is through a special U.S. Savings
Bond exclusion. You can exclude a portion of the interest that
accrues on such bonds if you meet certain qualifiers. Those
qualifiers include having paid education expenses in the year of
redemption; are not married and filing separately, and if you
meet the general base income restrictions.
Still another way to beat the taxman and save money on college
education is to make investments in your child’s name. Children
under 14 face a much lower tax rate and even as their income
grows it will likely be at a lower rate than yours. Just make
sure that the investment is in your child’s name and stay on
their good side because ultimately that money is theirs.
The final way to meet your college education needs that works
for some people is to hire your kids if you are self-employed.
There are some restrictions but once again any monies you give
your children should be plowed back into their own or the family
college education fund
How to Save for College and Save Taxes at the Same Time
0Saving for college seems to be one of the most mysterious and daunting tasks in our financial lives since it is nearly impossible to guess what college costs will be 18 years from now if you have a child born today. In fact, depending on which college your little protégé wants to attend, your best guess should be “it will cost a lot”. Saving as much as you can over the longest period of time will give you more options to choose from. The IRS has made it easier by authorizing a special savings program designed for paying future college costs known as a “qualified tuition plan” or “529 plan”, so named by Section 529 of the Internal Revenue Code.
Withdrawals from the plan can be used for a student (also known as the beneficiary) to pay for “qualified higher education expenses” including tuition, room and board, books and computers, and other mandatory fees as listed in the plan’s disclosure document. As long as the proceeds are used for eligible college expenses, and IRS restrictions are followed, the earnings in a 529 plan are not federally taxable. If money is withdrawn from these programs and not used for qualified education expenses, the earnings will be subject to income taxes and an additional 10% federal tax penalty.
Each state in the United States’ sponsors their own 529 plan, and each one offers you different minimum and maximum contribution limits. These programs are popular with wealthy grandparents as an estate planning device because some states have plans with contribution limits in excess of $300,000 during the life of the plan. The IRS allows individuals to gift up to $12,000 - married couples up to $24,000 – per year per person in 2008, which can be used to fund a 529 plan for a child or grandchild. In addition, you may be able to accelerate the plan by contributing 5 years of the annual gift amount at one time. That means a couple could contribute up to $120,000 in one year, per child, if the plan permits.
You can also move, or rollover, one states plan to another states plan as long as you adhere to each state’s restrictions. You are not required to choose a program in the state you, or the child you are saving for, live in. However, your state of residency may provide additional state income tax savings. As a bonus, 10 states offer matching contributions to residents who contribute to an in-state 529 savings plan. Those states currently include Colorado, Kansas, Louisiana, Maine, Michigan, Minnesota, New Jersey, North Dakota, Pennsylvania, and Rhode Island. The matching is limited to your contribution amount and income.
Beneficiaries of a 529 plan can attend any accredited college or university in the United States as well as certain foreign institutions. Although a four year tuition can easily surpass $200,000 at some universities, I must throw in a “what if…” here. What if you have more money in one of these programs than you can spend on college expenses? To avoid the federal and state income tax, and subsequent 10% penalty imposed by the IRS, you have the option to change the beneficiary of the plan to another member of the original beneficiary’s family as the new future college student. Money can also be withdrawn without adverse tax consequences due to the receipt of a scholarship by the student, or the death or disability of the student.
Since there are so many rules and regulations regarding contributions, withdrawals, qualified expenses, residency requirements, tax implications, etc. and because there are so many investment options available specific to each state, I recommend consulting with your financial advisor or tax advisor to determine if this type of college saving is right for your specific situation. There are many other options to choose from to save money for your child or grandchild’s future that may be less restrictive even though you may have to pay taxes as-you-go (such as a Uniform Gift To Minors Act account). You may also decide to develop a different strategy for different children based on their specific needs.
As in any investment decision, make sure you understand, and are comfortable with, the benefits and limitations of any vehicle you are considering in order to help you reach a particular financial goal.
College Planning: A Prepaid Education
0If you have kids, you know before long they’ll be grown up and ready to move on to the next part of their lives. For most, that means some sort of higher education, typically at a four-year institution. It’s not news that tuition continues to increase across the board at almost every major college and university. As state governments face tighter budget restrictions, one of the first areas to be hit is the price tag of a credit hour at a state university. In many cases, even if the state budget isn’t suffering, to keep pace with rising costs and inflation, universities are still forced to raise tuition.
There are a lot of options available to save for college. Even if you get started late, you have a wide-range of options. One of the most popular options today, is the 529 plan. 529s are in every state in the U.S. and come in two basic forms. One is investing in a tax-free savings account which is then invested by a state administrator in an attempt to achieve a rate of return that will help you outpace inflation. The other, a prepaid tuition plan, isn’t as widely available and isn’t in as many states. The advantages of both are different, as are the disadvantages, but here are some of the basics of a prepaid plan.
Prepaid tuition plans, a version of the 529 plan, are known as a Prepaid Educational Arrangement or PEA. There are two basic versions of the PEA. In one version, you buy units of future college tuition at today’s prices. These units are generally split up in percentages or credit hours. The other version allows you to buy contracts for a specific number of years of college. (Between 1 and 5) Simply put, a PEA allows a person to buy a future college education at current college prices.
You can pay for the PEA either in a lump sum, or in installations, but don’t expect a windfall from this type of college savings. The states who administer the plans, guarantee that your investment will, at the very least, match college tuition increases, which in some cases, can be a lot of money if you start investing early. These plans are also very low-risk and are much more conservative than other types of college savings. They aren’t recommended for late-starters though.
The PEA a handy tool for aunts, uncles, and grandparents who want to help a relative with their educational costs and one major advantage is that anyone can purchase a PEA for anyone else. No relation is even necessary.
One of the other drawbacks of the PEA is that it usually requires your child to choose a school in the state. But if your child is willing to abandon hopes of moving far-away from mom and dad, for a free education, it shouldn’t be a problem. One advantage though is that most PEAs are transferable to other members of your family in case one of your children decides not to attend college. Also, the distributions from the PEAs cannot be taxed by the federal government, as long as they’re used for tuition and fees.
One of the best examples of a PEA success story was found in USA Today, (11/6/01), Jeffery Smith, a lawyer in Florida invested in that state’s PEA program in 1982 after his daughter was born.
At the time, the state-tuition level in Florida was at a slim $17.50 per credit hour! Smith’s daughter recently graduated from the University of Florida, and when she did, tuition was $120 an hour! But, Smith locked in early, at a low rate, and was able to reap the rewards of the PEA.
Not all stories end this way, and PEAs might not be right for you. But saving for college has never been easier or more convenient and it’s never too late to start planning. PEAs are just one of the extensive opportunities for securing your child’s future and typically contain less risk. By meeting with a trusted financial professional and finding out your options, you move one step closer to helping your child take part in the most important investment of their lives: their education.
Manipal University Introduces New Courses and increases the allocation of scholarships in 2010
0615 days
by admin
in University
Manipal University, the leading higher education provider in India, announced that it has introduced new courses and allocate more scholarships for the year 2010 along with additional infrastructures and facilities to its students. The university has also tied up with many new foreign universities for better teaching and learning atmosphere on the campus.
Since establishing Kasturba Medical College in 1953, nineteen other institutions have been set up, and the excellence in higher education that began in Manipal 56 years ago, continues even today with a fresh look each year.
NEW COURSES:
The university has added ten new courses taking the total number of courses in the University to 264. Registrar, Dr G.K. Prabhu, giving details of the new courses, admission details, scholarships and other activities of the university told reporters that by starting Manipal Centre for European Studies the University took the first big step in the direction of humanities. The university catered to higher education in medicine, engineering and management. So a Masters course in European Studies and Management adds more variety for students to choose from. “Diploma in Gandhian and Peace Studies, and also Certificate courses in Public Health and Global Health have already started,” he said. “The other new courses introduced for 2010 include MS Wireless Embedded Systems, MS IT Management, MTech Chemical Engineering, MTech Environmental Engineering, MSc Pharmacoeconomics, and MSc Clinical Research management”.
SCHOLARSHIPS:
Manipal University has always encouraged students to perform to their full potential by providing them with scholarships. Meritorious and deserving candidates are given one of the several freeships and scholarships that exist in the university. “The allocation for the year 2010 is Rs 12.23 crores. It was Rs 7.93 crores in 2009 and Rs 6.83 crores prior to that,” Dr Prabhu said.
Freeship – Candidates admitted to MBBS course within the first 500 ranks and BDS, BE, BPharm courses within the first 1000 ranks of the respective merit list are offered 100% freeship.
AICTE Scholarship– AICTE has introduced the scheme on tuition fee waiver for women, economically backward and physically handicapped meritorious students joining BE, BPharm and BHM courses.
AGE students scholarships – There is a 10 per cent tuition fee waiver for students of schools and colleges of Academy of General Education (AGE) joining any course at Manipal University. However, the waiver will be 25 per cent for those students joining Allied Health Sciences or Nursing courses.
Scholarships for Konkani Students – A similar waiver of tuition fees, 10 per cent and 25 per cent respectively, is applicable for Konkani students also.
Other Scholarships are: GE Scholarship, Harish B Fund Scholarship, ISLE Scholarship, ITC Scholarship, Maulana Azad National Scholarship and Philips Scholarships.
INTERNATIONAL COLLABORATION:
Manipal University has robust relationships with several US, European and Australian Universities regarding student and faculty exchange and collaborative research. 14 best students of KMC Manipal and Mangalore get to do their one month elective clinical training in Utrecht University and Groningen University in the Netherlands. Similar scholarships are available to students of Media & Communication in
University of Queensland, Australia and Hochschule Bremen, Germany. Students of MIT get opportunities to do their internships in various Universities and industries across the world by being members of IAESTE.
ADMISSIONS:
Admissions for all these courses and for the existing under graduate and post graduate courses have already begun. Prospectus and forms are available across the country at selected post offices and State Bank of India branches. Candidates can also visit www.manipal.edu and download the digital prospectus and application or apply online by paying the application fees through Credit Card or Net Banking or Demand Draft.
ONLINE ENTRANCE TEST:
Talking about the online entrance test Dr Prahbu said; “Manipal University is known for its online entrance tests. Considering it to be quite popular and student friendly, the university has decided to start more centers where students can take their test online”. The final score are displayed on the test screen soon after the completion of the test. The admissions are therefore, merit based and transparent. Candidates can choose the date, time and location depending on their own convenience.
Presently there are 21 centres and six more are being included this year. They are
Allahabad, Kanpur, Patna, Ranchi, Varanasi and Vijayawada
Last date for receipt of applications:
MBBS, BDS, BE, BPharm, PharmD – 13.03.10
MD, MS, PG Medical Diploma, MDS, PG Diploma in Dental Materials – 31.01.10
About Manipal University
Manipal University is the leading higher education provider in India. Spread over 600 acres of green expanse, Manipal University is home to 20,000 students pursuing undergraduate and post graduate programs in diverse subjects. The University has a strong alumni network of over 72,000 members.
The University has created an ecosystem of teaching and research excellence making it a universally accepted destination by students. The breadth of disciplines and collaboration among constituent institutions gives unparalleled opportunity to students to cross departmental boundaries and explore different horizons
5 Tips For Financing College
0Current trends predict college tuition will continue to increasing at a rate twice that of inflation. A 2006 College Board report announced that tuition has risen 35% in the last five years. As a result, parents continue to worry about higher education expenses. How can future college students and their parents prepare for this imminent expense?
1. Calculate. Many tools are available to help parents plan for future costs. The College Cost Projector that is available from FinAid.org allows one to project future college tuition costs based on inflation rates and years of matriculation.
Other calculators, like the Tuition Savings Calculator from MSN Money.com, take into consideration variables like such as current funds, rate of returns, taxes, and college costs and help one to deduce the annual savings payment required.
2. Save! Once you have projected future tuition costs, begin saving small amounts along the way. One easy way is to take advantage of credit card offers such as the one described by College Money Guru Joseph Hurley from Bankrate.com.
Some credit card companies may offer the opportunity to start a 529 plan, a plan in which rebates are incurred for each purchase made on the card. These rebates will be put into the 529 fund to pay for future college education. However, this strategy only works if the credit card bill is paid every month, otherwise interest will out shine rebates.
3. Apply for scholarships. Thousands of scholarships are available and found easily through schools, service organizations and online. Fastweb.com remains one of the most popular scholarships sites, offering ways to narrow down searches to only the scholarships each specific college student needs. Scholarships can be given on a semester, year, two-year or four-year basis and vary in amounts.
Students should start searching for scholarships early and apply for as many as possible. The more scholarships the student applies for, the higher chance there is to receive a scholarship.
4. Apply for grants. Grants may also be used to fund education, although in smaller amounts than most scholarships. However, grants do not require as rigorous an application process as scholarships and are given out more freely. Many different types of grants exist including federal, state, minority, gender and low income.
One great way to search out grants is online through sites such as CollegeScholarships.org or by searching your state’s website for college grants.
5. Loans. Even with utilizing all the factors for financing a college education, there may still be a small gap that needs to be filled by loans. Just as scholarships and grants vary, so do too the types of loans. Federal student loans allow for the student to eventually pay off the loan after graduation.
The College Board (collegeboard.com) offers such a loan and allows for payment to be deferred until six months after graduation. A cosigner is required for this loan, but the cosigner may be dropped after a certain number of on-time payments from the student.
Parent loans, such as the federal PLUS loan (as described by finaid.org), have fixed interest rates and are not subsidized while the child is still in school. Loans such as the PLUS are fairly easy to acquire as only a modest credit check is required.
Finally, private loans may be taken out by the student and are often used to supplement federal loans. If students do not meet the credit requirements to obtain private loans, they may still be able to do so if their cosigner meets such requirements.
Even with the rising cost of tuition, college education is still possible through the utilization of these 5 easy tips. When used together, calculating, saving, scholarships, grants and loans will make your college student’s dreams happen.