Sofa college planning

THANK
YOU FOR
JOINING US!
OUR HOPE TODAY IS TO PROVIDE YOU WITH
SOME VALUABLE INFORMATION, HAVE SOME
FUN, AND ENJOY THIS NEXT HOUR.
WE WOULD LIKE TO WELCOME
YOU TO TODAY’S WORKSHOP
2
2016 | The Society for Financial Awareness

3
EVALUATION FORM
Please review this
form. I will be picking
these up at the end
of the workshop.
Do note – the
backside is to be used
for your specific
questions and issues.

4
First Question
“How much do I want to
pay?”
Second Question
“How much will I need?”
How much?

State of the University
5
Private Colleges
$32,405 per year
Public University
$9,410 per year
Cost Projections for School Year 2015-2016
Source: www.collegedata.com

Where Will the Money Come From?
6
Scholarships
 Competition is intense – No guarantees
 Cannot assume one will be obtained

7
Student Employment
• Many students who have
worked their way through
college over the years find that
part-time employment is a
valuable source of income and
work experience. Eligibility for
particular jobs may depend on
what financial aid your child is
receiving.
• Freshmen students are often
restricted to 10 – 20 hours of
employment per week to allow
them to focus on their studies.
• Students who work as teaching
or research assistants often
develop valuable relationships
with their professors.
Internships and work-study
programs with private firms,
government agencies, and
nonprofit groups become
springboards to grad school
and careers.

Where will the money come from?
8
• Federal Pell Grants are usually
only awarded to undergraduate
students who haven’t earned a
bachelor's or professional
degree.
• Federal Supplemental
EducationalOpportunity Grants
(FSEOG) is for undergraduates
with the lowest Expected Family
Contributions (EFC). It gives
priority to students who receive
Federal Pell Grants.
• The difference between an
FSEOG and a Pell Grant is that
while the U.S. Dept. of Education
guarantees that each school will
receive enough money to pay Pell
Grants, there is no guarantee
that every eligible student will
receive an FSEOG. Students at
each school may be awarded an
FSEOG based on funds available
at that school.
Financial Aid – Grants
Grants, unlike loans, do not need to be
repaid.

9

10
Financial Aid – Loans
 Federal Stafford loans come in two types:
 Subsidized (need-based). The federal government pays the interest on these loans while
the student is in school and during the grace period before repayment begins.
 Unsubsidized (if not qualified for subsidized). The borrower is responsible for the interest
accrued from issue of the loan, although not required to pay it until after the grace period
expires.
 Federal Perkins loans are low-interest loans for undergraduate and graduate students with
extraordinary financial need. The college is the lender, although the loan is primarily made
with government funds. No loan fees are charged.
 PLUS loans enable parents with good credit histories to borrow to pay the education
expenses of a dependent child who is an undergraduate student enrolled at least half time.

11
Personal Accumulation
 Coverdell Education Savings Account
(formerly the Education IRA)
 529 College Savings Plan

Personal Accumulation Coverdell Account
12
Benefits
 Tax-Deferred growth on money invested
 Custodian/Trustee maintains control of investment and
withdrawals
 Beneficiary of account may be changed
 May be established with any participating bank, credit
union, mutual fund company, or other financial institution
 Variety of investment options available
Not an inclusive list of all the benefits/limitations of this type of account. Other benefits/limitations may apply.
Seek competent advice before investing in this, or any type of investment vehicle.

Personal Accumulation Coverdell Account
13
Limitations
 Maximum Contribution = $2,000 per year
 Only one account established per beneficiary
 Counted against financial aid qualifications
 Withdrawals must be used for qualified education costs or be subject to
income tax and penalty
 Contributions must be made prior to beneficiary’s age 18 and account
must be fully withdrawn by beneficiary’s age 30

Personal Accumulation 529 College Savings Plan
14
Benefits
 Maximum Contribution = $300,000 / year (in most states)
 Tax-Deferred growth on money invested
 Custodian/Trustee maintains control of investment and
withdrawals
 Beneficiary of account may be changed
 May be established with any participating bank, credit
union, mutual fund company, or other financial
institution

Personal Accumulation 529 College Savings Plan
15
Limitations
 Limited investment options
 May be counted against financial aid
qualifications
 Withdrawals must be used for qualified
education costs or be subject to income
tax and penalty

Important Considerations
16
 Risk Profile
 Time Horizon
 Inflation Risk
 Taxes
 Procrastination

The Enemy Within: Procrastination
17
ACT NOW
“Don’t have
time”
0 – 5yrs old $2,000/yr
($10,000 input)
$0
6 – 18yrs old $0 $2,000/yr
($26,000 input)
TOTAL
12% tax-deferred
return used in example
$62,093 $62,785
This illustration does not represent any particular product. Past performance is not indicative of future results.
Seek competent advice before investing in any type of investment vehicle.

Final Jeopardy
18
 Which savings vehicle do I
choose?
 How much am I going to plan
for?
 How do I figure out
specifically how much I
need for my dependents?
 What can I do to get
started now?

19
EVALUATION FORM
Please take a
moment to
complete. I will be
collecting these
in a moment.
If you need a pen,
please let me know.

Thank you for your time!
Please complete your Program Evaluation.
We will be picking them up shortly.
Now would be a good time for me to answer
any particular questions you may have.

Sofa college planning

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