Just paid off DD's college plan!!

[sarahlovesmickey]

How would I find out if my state does this??? Who do I contact?? So, say the state university is $15,000 now, do I make payments on a 4 year program which would be like $60,000??? Can someone clear this up for me?...my mind is still in Disney world!!!

 

[dizcrazy]

There are a lot of ifs with pre-paying and also with the 529 BUT I will add that every financial planner I know (four of them, actually) highly recommend 529 plans. and three of those planners are using 529 plans to save for their kids future.

I dont "overfund" my DD's 529, meaning, I am not killing myself now to make sure that I dont have payments due in college. Instead, I am investing more in my retirement, but am also having money automatically deducted each month so college wont be a burden in the future.

If she doesnt want to go to college - I'll deal with that if it happens. In my family, everyone is expected to go to to college and quite frankly, I think that the job market also expects college degrees.

if she gets a scholarship - then She can use the money for other college expenses like books or maybe towards her masters. or i can give or "sell" the money to a close relative.

BTW OP - congrats!!!! What a great feeling!

 

[lillygator]

How would I find out if my state does this??? Who do I contact?? So, say the state university is $15,000 now, do I make payments on a 4 year program which would be like $60,000??? Can someone clear this up for me?...my mind is still in Disney world!!!

what state do you live in? The way the FL one works is you are locking in the price of the tuition now -- this years rate. Right now for my 2 year old a 4 year university plan would be $11,707.16 lump sum payment or $13,064.15 with monthly payment for 5 years or in excess of $17k if paid per month until DD graduates.

 

[HeatherC]

I would love to know the cost...not your exact numbers per se, just a general number. Like I mentioned....is it something like $30,000 a year (if that is the cost for the school) x 4 years for a total of $120,000. And how is that paid off...monthly like a mortgage? Do you finance the whole thing or do you pay what you can each month?

Anyone that can answer this, I would truly appreciate it.

Thanks so much!
HeatherC

 

[lillygator]

the cost is in my above post for a 4 year university tuition plan only (no dorm, etc)

ETA - what state are you in?

The Florida plan offers you to pay in full, make monthly payments for 5 years or make payments monthly payments until the child goes to college....
the lump sum would be above...5 year monthly would be aroun $235 and the regular monthly would be $80-$90.

 

[ZPT1022]

do all states do something like this or is it just a FL thing? can it be transferred between kids in the same family?

 

[grlpwrd]

We have Virginia 529's for all 5 of our kids.

For those inquiring about plans, please be sure to check www.savingforcollege.com . There are different needs and variables to consider and there is so much good info on that website.

 

[Chris]

Way to go!!!

 

[HeatherC]

Lillygator thanks for the link and info. I did wind up calling on Massachusetts plan and found out that our state's program doesn't work the same way.

Here we have to buy "tuition certificates" which cover a portion of the tuition each year. It is very confusing, and you can't pay monthly payments for like 5 years and have college paid. (You can do that on your own of course...just not through the UPlan).

And...they only let you make a payment May- June of each year. So you still have to make your own monthly payments into a separate account and then transfer it each year to them or make one lump sum payment). If I could pay each month for 5 years or so and be done, that would be great. Unfortunately, Massachusetts plan doesn't work that way.

And it is hard to tell what you need to save each month since there is something like 50 schools included. That includes your local community colleges as well as some of the top schools like Boston University which is like $35,000 a year.

Congrats to you!

HeatherC

 

[isyt]

You guys wanna laugh!!! I said let me google NJ and this thread was the first thing to pop up!!!! I didn't know how important Disboards were !!

 

[dcfromva]

do all states do something like this or is it just a FL thing? can it be transferred between kids in the same family?

ZPT1022,

529 plans can be transferred between kids in the same family.

Not all states offer prepaid plans, but just about every state has a 529 plan.

It looks like your state allows a deduction for contributions to the state 529 plan From Saving for college.com website:

"Connecticut's governor has signed legislation providing a Connecticut state income tax deduction for contributions into Connecticut's 529 plan of up to $5,000 per year for an individual and $10,000 per year for a married couple filing jointly. The deduction is first available for the 2006 tax year. Contributions in excess of the annual cap are able to be carried over for up to five successive years."

Link to the CT 529 plan.

There are a lot of 529 plans available. There are many variables in deciding which one is right for you. If your state doesn't offer a pre-paid plan (or you are totally sure your kids will not go to an in state college), then you can select just about any other plan that meets your investment strategy and has low expenses. Also, in that equation you have to weigh the value of the state tax deduction for participating in the state 529 plan.

There are lots and lots and lots of 529 options. You can get into funds that invest in the Vanguard 500 or funds that only invests in bonds. Also, many states have age based portfolios which have the objective of maximizing returns while dampening the wild swings in values (they invest in a range of securities to do this becoming more conservative as the child gets older).

-DC

 

[dcfromva]

Only bad thing is that FL Prepaid couldnt accept a direct rollover from the 529 so I may have to pay capital gains on the money the plans did make but it was so much of a better deal in the long run we figured we would take the risk.

winnyis,
Here is a reference from theIRS website on rollovers:
"Rollovers
Any amount distributed from a QTP is not taxable if it is rolled over to another QTP for the benefit of the same beneficiary or for the benefit of a member of the beneficiary's family (including the beneficiary's spouse). An amount is rolled over if it is paid to another QTP within 60 days after the date of the distribution. "
(Hopefully you rolled over into the FL plan within 60 days of your distributions.)

-DC