the website for that plan is: www.planforcollegenow.com
almost every state has a plan, some newer than others. some of them allow you a lot of control over the investments, and some don't. one of the things i like about ours is how many different options you get for investing.
you could probably just google "529 plans" or go to www.fool.com (the motley fool site) and read about 529s there. you could also set up an IRA for your child.
how about encouraging family to donate to the plan rather than going all out on birthday and holiday presents, or clothes? i would much rather have $50 in the account that will grow over the next 17 years than a bunch of clothes that will be outgrown in three months....
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Anyways when I was prego, the bank officer gave us this sliding scale chart which calculates how much you have to save per month to send your child to a four year public or private college respectively. Here are some interesting numbers:
Est Cost 4yr Pub Uni: $112,476.00
Est Cost 4yr Private Uni: $294,433.00
*You must save $284.00 per month in order to have $110,000.00 in 18 yrs
*You must save $517.00 per rmonth in order to have $200,000.00 in 18 years.
1 years old:
Est Cost 4yr Pub Uni: $106,110.00
Est Cost 4yr Private Uni: $277,767.00
*You must save $312.00 per month in order to have $110,000.00 in 18 yrs
*You must save $567.00/month in order to have $200,000.00 in 18 years.
3 years old:
Est Cost 4yr Pub Uni: $94,438.00
Est Cost 4yr Private Uni: $247,211.00
*You must save $310.00 per month in order to have $90,000.00 in 18 yrs
*You must save $688.00/month in order to have $200,000.00 in 18 years.
As if most of us could save 688.00 per month, or even 312.00 per month. Then if you have 2 or more kids the savings multiply.
I don't know girls seems as if America is doomed to collapse.....how can working class families possibly keep up? Car insurance, life insurance, HEALTH insurance, college savings, grocery bills and on and on and on and on......going back to balancing my check book now. :
For example, I filled out the FAFSA and it gave my out of pocket cost for attending my university for one year $25k. Even if we WERE having to pay rent each month, it wouldn't IMO, be possible to spend $6k+ on food alone for the 9 months it calculates for myself only. A way more realistic figure would be around $14k, and that is with out of state tuition. At the low end of savings and me living it up for 4 years, that would still be a "savings" of $24k off of what the government estimated for THIS YEAR alone for OUT OF STATE tuition.
Looking at such "required" monthly savings I think turns a LOT of people off because they see that there is no way they could possibly save nearly that much so they don't bother to even start.
Of course, private schools are more, but in my experience, there are also a lot more scholarships available. The year I went to a private Catholic college in New Orleans I think tuition/board was around $21k a year but something like over 85% of the students had scholarships and with mine, total cost out of pocket for the year was about $8k - including room & board.
That being said, for what a lot of colleges (especially the brand name ones) offer, there is no way in hell I'd pay their tuition, which on paper and in practice looks like it goes to football and basketball. I KNOW I'm getting a better education in my major at the university I'm at now than I would be at the university an hour away that's "brand name". (And I'm not afraid to let people like my dad have an earful when they start in on the "but name brand sounds good whine whine whine")
Just my 23971535 cents.
Edited to add: at this moment with my SO's crap paying job compaired to what he had before, we have no money to put in a college fund, but as soon as he starts making what he should be, it's starting.
I dont think the figures are inflated at all - except for the fact that they count on your principal appreciating at a certain rate - which given the state of the market right now - I wouldnt count on it.
Even if you only saved 284.00 a month, if you never earned a lick of interest you would only have 61,344 saved for the babe's education in 18 years. Divide that by 4 years of school and that is only 15,336 a year. Not much IMO, and certainly not in consideration of today's ridiculously priced education.
It is also entirely probable that a student could spend 6,000 a year right now (let alone in 18 years) on food and housing. Particularly in any of the coastal areas and especially urban cities. In NYC its hard to find a decent roommate situation for less that $750 per month PLUS utilities.
Nevertheless, I do agree that more scholarships and discounts for certain students, are available now than before - but better safe than sorry. If they dont use the money for college and they get full academic scholarships (like all the little bumpkins on MDC will!!!) - at least the money will be around for their weddings - or a more likely sceanario - a downpayment on a house.
Lastly, I agree about namebrand versus public - each has alot to offer but I am a fan of the 2 year community save a big bundle and then move onto the 4 year more expensive schools.
And no one should be scared off from saving, something anything helps. A penny saved is a penny earned as the saying goes.
We save all our change for around 3 months, and sometimes even throw some small bills into the piggy bank. Then we roll it all up, cash it in.
We then match from our checking account the same amount that we saved in change. It usually is a $100 or so, so we match it for a total of $200 and put it into her brokerage account.
It doubles the savings, and it doesnt hurt as much when half of it is saved over such a long period.