Comments on: Best 529 Plans

By: kaplan

kaplan — Thu, 06 Aug 2009 14:43:50 +0000

I compared NY, Utah and Virgina’s 529 plans and the one thing that concerns me is the following:

Does the sponsoring state exclude the value of an account for state financial aid purposes?

NY: yes
Utah and Virgina: No

The aspect that is attracting me to 529s was that my child’s chances of getting financial aid was better. Am I reading this correctly? If investing in Virgina or Utah’s 529 will count against my child’s chances of receiving financial aid?

Can anyone explain this?

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By: James

James — Mon, 20 Jul 2009 15:22:57 +0000

I have two separate 529 plans in Virgina. Both of them are the VEST 529. They have a few options, but pretty much all of them are age based and adjust automatically as the kids age. Really easy to setup the ACH transfers too. Also, management fees are very low. When I joined there was an application fee, but I believe this is waived now.

By: Kathy

Kathy — Mon, 20 Jul 2009 14:00:34 +0000

You should consider the Monetta Young Investor Fund. Great performance,low fees,low minimum and a financial literacy program that will get the kids involved in the savings process. If you want tax advantage of a 529, open a Coverdell account. This is the ideal college saving option ,not a 529 plan.Website: younginvestorfund.com

By: Kristen

Kristen — Mon, 20 Jul 2009 02:52:46 +0000

If you do opt for a 529 – be sure to watch out for excessive fees. Advisor based fees tend to be absurdly expensive. Direct-sold funds tend to be the least expensive. Also, funds run by Vanguard and TIAA-CREF generally have low fees.

By: Sandy E.

Sandy E. — Sat, 18 Jul 2009 22:45:40 +0000

Have you considered ESAs instead? Education Savings Accounts, called Education IRA. For a variety of reasons, this is Dave Ramsey’s first choice over any of the 529 plans. He has a chapter devoted to College Funding in his Total Money Makeover book. He makes some good points. I would go with an ESA instead. He says that the best 529 plans available are the flexible plans, not the 529 life phase plan or a 529 fixed portfolio plan, but still 529’s are his second choice — the first being an ESA plan.

By: Lisa

Lisa — Sat, 18 Jul 2009 17:03:55 +0000

I so agree with Mrs White! There are so many options for college funding other than the parents footing the bill or children going into debt. Community College is a terrific option for getting the first two years out of the way at a reduced rate. Freshman English at CC is going to cost a fraction of University prices and the class credit is exactly the same! If you want bragging rights, transfer to the fancy school for your last two years — you’ll only have two years of high tuition to pay and the degree will still say “fancy school” on it in the end.

Also, check out other options. For example, kids that graduate from high school in Wyoming can go to the University of Wyoming pretty much for free on the Hathaway Scholarship. All you need to do is have a decent GPA — nothing spectacular. Also, if you have a college degree, your kids may be able to attend your alma mater as a legacy at a much reduced tuition rate. There are scholarships everywhere for all sorts of talents and skills. It just takes a little bit of research to find them. My husband finished college on the GI bill, having enlisted in the Marines after his first semester of college.

I honestly don’t see the point in a parent having to invest in these plans that cost a substantial amount in fees and management costs. What’s to stop a kid from getting a summer job throughout junior high and high school and socking away much of that money? If you are willing to think smart and work smart, college does not have to result in $75K of student debt or anything close to that.

By: Mrs. White

Mrs. White — Sat, 18 Jul 2009 11:38:58 +0000

I am so glad you made a point here about it being okay NOT to have money for children’s college. Parents have to survive themselves first and make sure they are okay in retirement. My own opinion is this: For most people, they cannot afford to pay for their child’s college education. They shouldn’t have to. A child can go to community college, then move on to a state college. Total debt would be around 20,000 or so. (Unless they are working hard during the school year or summers and paying this down as they go along.) The child should only go to college if they plan to use a specific, focused degree in order to make a good living later. In this way, the debt is not a burden.

On the other hand, if a child wants to attend an excellent, ivy league school or something of that caliber, they should work very hard to earn a scholarship. Or, work for years and finish school many years later. I have a relative who spent more than 10 years in night school while working full time before she got her masters. It can be done. I also have a daughter who has attended community college for a couple of years for free, to earn the basics in credits. she then goes on to a state college for the last 2 years for her bachelors. She will have a very small debt.

One thing that can be done, if your child wants to get a degree from a specific college,in most cases they can enroll in the last semester or last year and the degree will have THAT schools name on it. This is a very inexpensive way of obtaining an education while getting a degree from a “good school.” (By attending community college first)

I really don’t think paying for school is a burden the parents need. Unless, of course, they are wealthy and have plenty of money.