Although the government provides many different forms of financial aid for college students, they also expect the student and the parents to contribute a monetary sum. This is called the Expected Financial Contribution (EFC).
Computing your EFC is easy enough to do, especially if you are working with a respected college funding solutions provider like John McDonough’s The Studemont Group College Funding Solutions, LLC. The problem lies in the result of your EFC, as there are times when the amount that comes up is far more than what you were expecting.
Most parents have savings and investments to pay their children’s college cost. Those who have not prepared enough, however, may find the need to tap their retirement accounts, such as their 401(K). If you’re contemplating on loaning from your 401 (K) to augment your college funding solutions, here are some things you should be aware of.
It significantly reduces your overall retirement funds. Borrowing from your account limits the growth of your earnings. For instance, if you take out a $25,000 loan, that amount won’t be earning any interest all throughout the loaning period. Therefore, you lose not only the gains from the accruing interest but also from compounding and tax deferral.
It pays to know how the system works, especially when it comes to college funding solutions. So, you’ve filled out your FAFSA and maybe you’re wondering how a financial aid administrator will determine your if you are legible for financial aid based on the Expected Family Contribution. Learning how would help you better understand your options for financial aid and this is where turning to a financial advisor like John McDonough of The Studemont Group comes in.
To further aid you with such financial matters, you can employ the services of specialists such as John McDonough of The Studemont Group College Funding Solutions, LLC. These organizations are here to help you find the best solutions for college funding based on your unique financial situation. Such companies also offer cost-efficient plans for their clients such as suggestions to apply for college scholarships at the desired schools, as well as proper handling of one’s finances to ensure maximum usage and minimal loss.
When it comes to acquiring quality education, you should exhaust any and all resources to get the best deals available out there. Let the experts give you and your student the extra boost you need to get the college slot your child deserves.
Unlike parental assets, the child’s assets count for more in aid calculations, typically up to 20 percent. Therefore, one of the most practical solutions for college funding hitches whereby a college-bound child has several assets to his name is to transfer them to their parents. Transferable assets include noncustodial accounts (e.g. regular savings, certificates of deposit) and Series I and EE savings bonds. Conversely, custodial accounts and trust funds must remain in the child’s name.
Opportunities like these warrant the services of a reputable college funding solutions specialist like John McDonough of Studemont Group College Funding Solutions, LLC. Finding the right school and/or applying for the right scholarship can be quite intimidating, particularly without enough knowledge about the different grants and programs available. Taking other factors like cost of living and study schedules can make the process even more complicated.
College funding specialists can help parents and their children take advantage of the funding solutions available to them. For example, undergraduate transfer students who failed to meet the requirements for the Undergraduate Transfer Scholarship program might want to move to states that have ‘reciprocity’ for reduced tuition, like California. However, they’ll need to stay in these states for at least a year to establish residency, which is required for students to become eligible for the smaller rates.
Investing in qualified tuition plans, commonly known as 529 Plans, is a popular way of saving for a child’s college education. Created under Section 529 of the Internal Revenue Code, these state or university-sponsored plans can greatly help in paying for the college education expenses of the account holder’s beneficiary.
Not all 529 Plans, however, are created equal. Chicago-based financial research firm Morningstar annually rates 529 Plans, mainly according to required fees, quality of supervision or oversight, and investment options. From their latest evaluation, it appears the size of a plan’s assets does not necessarily determine its favorability.