Everyone knows that these days college becomes more and more expensive. If you don’t want to get caught unprepared once your children go to college, you should ask for advice to Filippini Financial Group: they care about your wealth, therefore they care about your future.
Despite a decade of low inflation, the price of higher education has increased more and more. According to The College Board, which is a not-for-profit association that helps students and parents prepare and pay for college, both private and public institutions have nearly doubled their fees over the last 20 years.
But nowadays, everyone knows that a college education is an investment that will repay your sacrifices in the future; so no matter how much it costs, it is very important that your children go to it. The College Board estimates indeed that individuals with a bachelor’s degree have a wealthier life than individuals that only have a high school diploma.
Clearly, over a lifetime, the gap becomes more and more greater and you will get more than enough to repay your investment.
The average cost of tuition fees at a four-year institution was estimated between 3,131$ – for a public two-year institution – to 29,056$ – for a private four-year institution – in 2013 and increased by an average of 3.9 percent in 2012 – 2013. But to this price tag, you should add in room and board, books, travels and other various costs that will increase highly the average cost of college.
This only means something: funding a college education is going to take planning and for sure, you cannot start saving when they are already in high school. To make sure that your children will have enough money to go to college, it is best to ask for a professional to plan ahead for you. At Filippini Financial Group, they know anything about Student Aid, inflation and anything else that you might want to know before starting to save for your children’s future and they know that it is better to prepare for helping them, when they are very young. Furthermore, starting early will allow you to save a smaller amount of money each month that won’t turn upside down your monthly income.
But everyone knows that with all the other expenses, competing for your monthly income, such as mortgage and car payment, it won’t be easy to manage to save every month a small amount of money for your children’s future.
That is why, at Filippini Financial Group, they will suggest you to start as earlier as you can because the earlier you start, the more you will accumulate.
To better understand why this is so important, you should compare the decisions of two hypothetical families. The Williams and the Morgan both want to send their children to a college whose four-year total cost is approximately $40,000. The Williams decide to start saving as soon as Mary is born, putting away $100 per month earning 8% per year. When Mary will apply for college, her parents will have saved $48,749, more than enough to cover the entire cost.
The Morgan, on the other end, decided to wait until John is 10 years old because they didn’t think that it was useless to start saving before.Though, they decide to save $250 per month. By the time John applies for college, they will only have saved $34,163; this means that they will have to make more sacrifices than the Williams to help their child graduating.
Of course, this example is hypothetical but it clearly shows that the earlier you start saving, the less you will need to spend once your child is actually in college.
Luckily for you, at Filippini Financial Group, they know several savings strategies that will help you through this hard decision. First of all, they will evaluate with you how much money you will need for college, keeping in mind inflation too. Also, they will create a systematic plan that will make saving easier for you. You can decide, indeed, whether to save monthly or quarterly just as you would do for a mortgage.
At Filippini Financial Group, employees also know that it is best to keep a separate college account and the most popular is custodial account, which will ease a bit the tax burden. It is also advisable, to create an incentive plan. Employees at Filippini Financial Group know that when the child is aware of the sacrifices his or her parents are making, he or she will care even more about being successful during his or her academic career.
If you don’t make it to save enough money before college even starts, at Filippini Financial Group, they will be able to suggest a lot of alternatives that will help you get the money you are missing.
For example, you can ask for a grant, which do not need to be repaid, or a federal loan, which offers very interesting rates.
Around January 1st, the Federal Free Application for Federal Student Aid determines if and how much final assistance you are awarded by the government and both private and public schools use this standard form to award their own scholarships as well.
Some schools will also require the Financial Aid Profile to assess the need of other non-government funds.
The Government offers many types of loans; these are the Stafford Loan, the PLUS Loan and the Americorps loan. The Stafford Loan can be released using government funds or other institutions funds and it is available for everyone, even though families with incomes under 70,000$ don’t have to pay any interest and they will start repaying the loan, once their child has graduated. PLUS is an acronym for Parent Loan for Undergraduate Students; this loan is generally funded by local banks and saving and loan institutions. The maximum amount that you can require is calculated on the total cost of college, minus the amount of financial aid received. If you do get this loan, you must start repaying it immediately with an interest rate of 9%.
As you probably already know, Americorps is a network of national service programs that engage many Americans each year. Candidates must be U.S. citizens, nationals or permanent residents that are 17 years old or older. After completing the service, Americorps members become eligible for education awards that can be both used to pay higher education fees or repay student loans.
To get further information, it is better to schedule an appointment with one of the Filippini Financial Group employees. They will know for sure how to suggest to you the best plan for your children’s future!
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