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Writing tuition checks? Check your asset mix, too

By: Daniel D. Reyes, CFA
Principal, Vanguard’s Education Savings Group
July 27, 2015

I'm in the earliest stage of college investing, saving for my son, who’s about to turn 2. Since we've got about 16 more years to go, we can afford to take on a bit more investing risk to get the potential for more reward. That means we can have a larger percentage of stocks, which provide a greater opportunity for growth, but also a greater potential for losses, based on a variety of factors.

On the other hand, my colleague Kim Stockton (with whom I've been studying college savers' investing behavior) has kids aged 10 and 14. She's getting closer to the tuition-checkwriting stage, so while she's still looking for growth, she's also aware that she's getting closer to the time she'll need to preserve her account balance to pay expenses.

Kim and I have been spending a lot of time diving into the investing trends of nearly 1.3 million investors across 5 529 college savings plans.* The patterns of people in that checkwriting stage (children ages 19 or older) showed the stock percentage in their portfolios—and the potential pain a drop in the market can inflict without time to recover from any rebound—wasn't always aligned with their need to preserve savings to meet tuition demands.


By Mary Anne Busse
Managing Director, Great Disclosure LLC

July 20, 2015

When I went to college, there was no such thing as a College Cost Calculator.  We just knew that some schools were more expensive than others and hoped that a combination of scholarships, grants and loans would get us through.  Sometimes I think we may have been better off not being able to calculate the expected cost of college – a College Cost Calculator can be a scary thing.  

Today, the college cost calculator can scare parents of younger children into thinking that college is not attainable.  Recent data from the National Center for Education Statistics shows the most expensive schools in the country topping $49,000 a year for tuition and required fees!  Using the College Cost Calculator that CSPN offers, assuming my seven year old attends private college for 4 years and costs rise 5% a year on average, I’ll be expected to pay over $316,000! That’s enough to scare even an avid saver!

A Recent College Grad’s Take on College Savings

By Joshua Grizzle
Marketing Coordinator, Georgia’s Path2College 529 Plan
July 13th, 2015

College debt and student loans are no joke. As a recent college graduate from a small town in Georgia, taking out loans to obtain a degree so I could get a job to work to pay off my loans didn’t become real until now. The “real world” is nothing like I imagined. From formal meeting etiquette to who and how to blind copy on emails, entering the work world was a learning curve. With the pressure of paying my student loans off, having the opportunity to work within the 529 industry has opened my eyes and sparked my passion for college savings

I would not exchange my college experience for anything; however, with my six month grace period up in August, I am about to enter the world of student loan repayment. While I begin my journey of repayment, I am more eager to help the parents and students avoid student loans. Statistics are now a bit more salient to me as I learn more about the importance of savings.  Skipping that cup of coffee each week or depositing some of my birthday money into a 529 account would have certainly made the difference in paying for my higher education. 

How to Take the Mystery out of considering a Prepaid Tuition Plan

By Lauren Shipley
Director of Marketing
College Savings Plans of Maryland

Around this time of year families start to prepare for their recent high school graduate to go off to college.  Some have looked at their financial aid package and breathed a sigh of relief because they saved, while others have gone into a state of panic.

Studies have shown that saving versus borrowing can cut the cost of college in half.  529 plans, tax-deferred vehicles for saving for college, can provide that sigh of relief for families willing to set goals to save for college.  

Many do not realize there are two types of 529 plans: prepaid tuition plans and savings plans. A prepaid tuition plan allows you to pay a child’s tuition and fees in advance, with the intent of locking in today’s prices.

Sometimes prepaid plans can be hard to understand compared to the standard savings plan.  So, let’s see if we can narrow down some of things you should consider.  

Bright Futures Start with Being a Champion for Others’ Success

By: Betty Lochner
CSPN Chair & Director of Washington’s Guaranteed Education Tuition (GET) Program
July 2, 2015

Last month we ran a special promotion through Facebook in order to bring attention to National College Savings Day (5/29) and to encourage American families to begin planning and preparing for their children’s educational futures. Unfortunately, two-thirds (66 percent) of Americans still don't know what a 529 plan is, according to the annual 529 Plan Awareness Survey from financial services firm Edward Jones. 

In a press release announcing the survey results, Steve Seifert, Principal at Edward Jones said, "Despite headlines focused on the increasingly high costs of college, we still see a significant number of Americans who aren't aware of one of the most important long-term savings vehicles that can help minimize the impact that the cost of education has on families.”

As an industry, we have a big job ahead of us as we strive to create awareness of 529 plans and their benefits to American families. While there are many financial benefits associated with 529 plans, I think it’s important to remember all of the personal growth and motivational factors that influence our children when we invest in their future.

“Water Balloons and Summer Break”

By Rachel Biar
Assistant State Treasurer for the Nebraska 529 College Savings Program
June 29, 2015

Growing up, I couldn’t wait for summer break. Warmer temperatures, more time outdoors, water fights, swimming, family vacations, and time off from school. And while the days of my youth have long past, I still look forward to summer. Letting the deep, dark soil drift through my hands as I plant my vegetable garden and flower beds, long weekend getaways, family picnics, and, yes, even the occasional water fight with my niece and nephews. Summer is an opportunity for me to re-energize myself and reconnect with extended family.

As you’re making memories with your families, summer is an ideal time to think about college savings. The children who will be going back to school in a few short weeks may be only a few short years away from college. Are you ready for their college expenses? It’s never too early, nor too late, to start planning for your child’s future, and getting started is easier than you might think. Each 529 plan has many resources available to aid you in setting up an account, or two.

The Trend is your Friend: Paying for College

By Paul Curley, CFA
Director of College Savings Research, Strategic Insight
June 22, 2015

As a society, we seem to focus quite a bit on trends.  While not all trends are great, there are a few that can help your children excel in some pretty incredible ways.

First, the world is becoming more digital. Just look around you, most people have multiple devices. While some have multiple devices to divide work and personal emails, others have wearable devices for more technical purposes such as keeping pace during a marathon. Is it that these devices are so ingrained in our culture that we do not even notice them, or is it that we have become more detached than ever before? For example, the late spring season marks the beginning for many things including college graduation and baseball. In Boston where I grew up, the trains this time of year would be flooded with people going to a Red Sox game and the air would be electric from the overall excitement for the game, but now interaction through technology devices is typically higher than face-to-face communication. Further, the expansion of robo advisors shows a push by technology into the financial service industry and replaces what has typically been completed by meeting in person with a financial planner. 

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