A Year of College Affordability Solutions

College Affordability Solutions is dedicated to helping families keep higher education spending within their means. It uses this website to highlight postsecondary educational cost-management strategies at the times of the year when you and/or your student are most likely to need them.

21-of-the-most-beautiful-college-campuses-in-amer-2-20243-1428837186-9_dblbigDespite those who’ll try to talk your student out of college, postsecondary education is still worthwhile even if he or she has to borrow to pay for it. But student loans increase the cost of college, so do everything possible to minimize their use.

Over the last year, we’ve covered several approaches to keeping college and college-related debt affordable. Click on any of the links below to learn more . . .

Before College

Various investment and savings programs can help you prepare for college bills. Among these are 529 plans and college savings bonds, but you should explore them all – the sooner the better.

And be sure to apply for financial for every year of college. Complete the Free Application for Federal Student Aid (FAFSA) as soon as possible after October 1 but, by all means, before your FAFSA priority deadline arrives.

Student dependency status plays a big role in who completes the FAFSA. Other family factors do, too. But it isn’t as hard to complete as you’ve heard, especially if you fulfill 5 key steps, gather all the documents you need, and get answers to your last-minute FAFSA questions before doing so.

Long before the FAFSA, your student needs to begin aggressively searching for scholarships. It’s critical to know about the when and where and the how of doing this.

Pay close attention after you file your FAFSA to make sure you handle what happens next. Then carefully assess your financial aid offers as they arrive from colleges.

But it’s not all about financial aid and scholarships. A critical factor in college affordability is for your student to enroll in a college and major that fits him or her well.

During College

Once college begins, you can help your student keep his or her expenses within reason.140815_FF_BestCollegeCard Limited spending and indebtedness is important even with today’s low college loan interest rates.

Some of the most effective strategies for minimizing student borrowing include your student getting through college in 4 years or less while carefully managing money and avoiding rip offs such as the recent “student tax” scam. A little-known but highly-effective cost-saver involves returning unneeded federal loan dollars with 4 months of disbursement.

Help your student keep college more affordable by giving him or her some holiday gifts that’ll lower his or her reduce expenses upon returning to school and by recommending he or she generate funds through seasonal employment instead of borrowing.

After College

Seven out of 10 students borrow before earning their degrees, and over 90% of their loans come from federal loan programs. Fortunately, the government has designed  post-graduation strategies to help keep educational debt manageable.


Your student needs to understand what happens to college loans after graduation. It’s worthwhile to consider the pros and cons of student loan consolidation, an often-used tactic for reducing monthly debt payments. Equally important is knowing how your student might qualify for forgiveness on all or part of what he or she owes.

Coming in 2017

We’re taking a few weeks off for the holidays, but beginning January 4 we’ll start publishing again about plans for keeping college affordable. Here’s hoping you have the happiest of holiday seasons, and that you’ll rejoin us then!

 Find out more about College Affordability Solutions and its services at https://collegeafford.com, or by calling (512) 366-5354.

College Savings Bonds: An Affordable, Safe, Simple College Investment

Do you have a modest income and a limited amount to invest? Are you looking for a treasury-bondssafe, simple way to invest it? Are you interested in tax breaks that’ll free more of your other money for college savings bonds? If so, think about college savings bonds. Here are the fundamentals . . .

The U.S. Treasury Department sells education savings bonds. They’re extremely low-risk because they’re backed by the full faith and credit of the U.S. government.

There are two types of education savings bonds. You can buy Series “EE” bonds at half their maturity value and they slowly grow into that amount based on a fixed interest rate 3-ussavingsbonds_590x394that never changes. You can purchase Series “I” bond in denominations of $50 to $10,000 they grow into those amounts by paying interest based on inflation every 6 months.

You, or you and your spouse, may buy education savings bonds for your child (also for your spouse or yourself) directly from the Treasury at http://treasurydirect.gov/. You can redeem them as soon as a year after buying them, but if you do this less than 5 years after buying them you’ll lose the last 3 months of the interest they earn.

That interest isn’t subject to state and local income taxes. It’s also excluded from federal income taxes if:

Your tax exclusion starts to be limited if your MAGI exceed these amounts, and, if your MAGI reaches $91,000 and $143,950, respectively, they’re eliminated.

Your tax exclusions will cover whatever savings bond principal and interest you use to pay tuition and required fees at an accredited U.S. public, nonprofit, or for-profit college, university, or vocational school. If your student receives money from scholarships, other college investments (e.g. 529 plans), and carious educational benefits such as VA benefits, employer-provided educational assistance, etc. your tax exclusions could be limited.

Want to know more? Check out the Treasury Department’s publication called Using Savings Bonds for Education and its Education Planning webpage. And remember, every penny you invest and save makes your child less reliant on student loans to pay for college!

 College Affordability Solutions can help you evaluate various strategies for paying for college. Call (512) 366-5354 or email collegeafford@gmail.com.

Saving for College? Consider a 529 Plan.

One of the best ways to save for college education is a 529 plan. This is an investment designed to help save money for a child’s future college expense. Here are the basics.

A 529 plan — also know as a “Qualified Tuition Plan” — is owned by whoever opens the plan: a parent, other relative, or family friend. The child for whom the plan is img_4691designated is its “beneficiary.”

You may contribute to a plan even if you aren’t its owner, but the owner controls it. Contributions of up to $14,000/year ($28,000/year for married couples) aren’t subject to federal gift taxes.

529 plans offer other tax breaks — no federal income taxes on what they earn, and many states offer residents state tax benefits on their 529 plans.

One type of 529 plan is a “prepaid college tuition program.” This purchases all or part of the beneficiary’s future tuition at a rate set today so, as tuition rises, it’s already been prepaid at a lower rate.

The other type is a “college savings plan.” Plan managers invest what you contribute. You usually have different investment options, and earnings vary according to the return on those investments. Some college savings plans are riskier than others, so you could end up losing some or all of what you put in if they perform poorly.

When the beneficiary goes to a college covered by a 529 plan, what’s withdrawn from the plan isn’t subject to federal taxes (or state taxes in many states) as long as it pays “qualified education expenses” — tuition, fees, books, class supplies and equipment, certain room and board amounts, and some other college costs.

If the beneficiary doesn’t go to college or use everything in a 529 plan, what’s left may roll over to another beneficiary. This must be a relative of the original beneficiary — a sibling, cousin, niece or nephew, parent, etc.

All states and some colleges offer 529 plans. The earlier you contribute, the more the plan is likely to earn. But be sure to check out any plan you consider for “portability” — the number and locations of the institutions at which the Plan can be used.

To research each state’s 529 plan(s) and how to open them, check out the College Savings Plan Network’s website. For 529 plan information on federal taxes, qualified education benefits, and rollovers see pages 59-62 of IRS Publication 970.

College Affordability Solutions can help your family devise strategies to prepare financially for college. Call (512) 366-5354 or email collegeafford@gmail.com to make contact with us.