Financial Aid

• The Advantages of Buying Used Textbooks
• Fund Your Schooling With PLUS Loans
• 5 College Scholarships You Could Qualify For
• Can't Pay For Your Textbooks? Rent Them
• Students, Get More Bang For Your Textbook Dollars
• 5 Unique Ways To Make Extra Money In College
• Tuition Insurance: Worth It Or Waste Of Money?
• Tuition Reimbursement: Tax Policies And Benefits
• Free Government Grants For College Education
• The Benefits And Costs Of Attending A Community College
• 6 Tips On How To Save Money For College
• Best Financial Aid For Graduate School
• Saving For College With A Coverdell Education Savings Account
• The Pros And Cons Of 529 Prepaid College Tuition Plans
• How To Buy College Textbooks On The Cheap
• The Hidden Costs And Fees Of College Education
• The Benefits And Eligibility Of The GI Bill
• A Guide On Federal Student Loan Forgiveness
• 4 Tax Breaks For College Education Expenses
• Everything You Need To Know About 529 College Savings Accounts
• 7 Tips To Avoid Student Credit Card Debt
• College Savings
• Scholarships
• A Guide To Applying For Student Loans

The Advantages of Buying Used Textbooks

College comes with a lot of costs, from ever increasing tuition to trying to get food that isn't ramen to eat. Textbook prices range from reasonable to absurd when you step into the school bookstore, making you wonder if there's a better way than paying a few hundred dollars for all of your books in a semester. Luckily, the used book market has never been better, and there are plenty of reasons why you should pick up a used textbook over new or rented ones.

New Editions Aren't All That Different

It seems like some textbooks have a new edition every year, especially if the professor is the one writing the book. Unless you're taking an absolutely cutting-edge class that makes its current technology obsolete within a semester or two, chances are the textbook publisher is going after a cash grab. If you don't need to stay on top of the latest and greatest technology, look at the books from a few editions ago. These copies are substantially cheaper than the new textbooks, and pretty much all of the information is unchanged from edition to edition. You may have a bit of difficulty in matching up page numbers for reading, but that's the only real trip up you'll encounter when you buy older editions. The only type of textbook you can't use this method for are the ones that come with an online access code for essential classroom features.

International Used Textbook Access

Another option to drive your costs even further down for used textbooks is by looking into the international editions. These are editions the publisher makes available throughout the world, and they are often less expensive than the textbooks circulating in the United States. Since international textbooks cover a wider market with varying cost of living and economies, the prices tend to be lower than the used textbooks you have immediate access to. It may take some time to search out the proper international edition textbook for your class, but it's well worth taking the time to sort through all of the listings to find your prize.

Where to Find Used Textbooks

Stop before you buy used textbooks through the college bookstore. Even though that's the most convenient option, it's not going to be anywhere near your cheapest option, especially when they don't carry many previous editions of books. Amazon's online marketplace is an excellent source for used textbooks, especially as you have many online sellers competing against each other on price, with a wide selection that ensures you find older versions of your necessary textbooks. However, Amazon isn't the be-all, end-all of used textbook sales. eBay is another good source for used textbooks, especially international editions. Specialty retailers, such as Abe Books, center their businesses around used textbook sales, making it easy for you to find the books you need before the next semester rolls around.
Textbook prices border on the insane, especially if your professor likes to put out a new version of the same textbook every year. Instead of dealing with high book prices on top of your already high tuition, save your student loan money and look for alternative options for your used textbooks. It saves you a lot of time, frustration and money down the road when you have a good source for your books. In most cases, the professor won't care or may even encourage you to seek out older versions of the text.

Fund Your Schooling With PLUS Loans

The U.S. Department of Education runs another loan program designed for parents of university students to financially assist their children. The PLUS loan (parental loan for Undergraduate Students) program is also intended for independent graduate or professional students. Beginning in July of 2010 all PLUS loan funding comes from the U.S. Federal Government under the Direct Loan program. Prior to this date funding was under the Federal Family Education Loan (FFEL) program and came from private lenders.

What Is a PLUS Loan?

Parents of undergraduate students (and graduate or professional students) can receive up to the total cost of their education minus any other financial aid (grants or scholarships) that they benefit from. The PLUS loan is not income dependent but applicants will have to pass a moderate credit check. They can pass so long as they do not have an adverse credit rating, or failing that if they can prove extenuating circumstances or obtain a co-signer they will be accepted for a PLUS loan. Interest rates are fixed at 7.9% and both the student and the parents must fill out a FAFSA form to apply. Parent borrowers must also fill out a Direct PLUS Loan application and a Master Promissory Note (MPN). An MPN is a legal document that requires the parent to repay the loan. These forms are available at your school's financial aid department and in some cases online.

All funds from a PLUS loan must be applied towards education expenses, such as tuition, student fees, on campus lodging and food, books and more. Even the cost of a computer will qualify. Any remaining funds are sent to the parent (or the student if they are the borrower). Unlike other loan programs payments to repay the loan begin immediately, although a deferment on paying back the principal while the student is enrolled at least half time and during the six month (grace) period after leaving school is allowed. Interest payments must be made from day one or they will be capitalized (added to the principal to await the end of the six month grace period).

Maximum Loan Amount

There is no maximum that you can receive under the PLUS loan program, unlike the Stafford and Perkins programs.
The Federal Family Education Loan (FFEL^SM) Program, before July 1, 2010, was also funded by private lenders. This included Stafford, PLUS and Consolidation Loans. However any new loans made after July 1, 2010 will be funded through the Direct Loans program by the U.S. Department of Education at the reduced interest rate of 7.9%.

Eligibility

There are certain eligibility requirements that must be met before approval can be granted. These are as follows:

• If the borrower is a parent, s/he must be the biological or adoptive parent (although in some cases they may be a stepparent).
• Both the student and the parent must be U.S. citizens or eligible non-citizens.
• Both the student and the parent must not be in default of other federal education loans.
• The parent borrower must not have a bad credit history. If they fail the credit check they can still receive a loan if they can prove extenuating circumstances (determined on a case by case basis). They can also receive funding if they can get someone to co-sign the loan that can pass the credit check.
• The student must be dependent and enrolled at least half-time in a school that participates in the Direct Loan program. You are considered dependent if you are less than 24 years of age, not married, have no dependents, are not a veteran or a professional or graduate student.

Disbursements and Fees

The Department of Education will send the funds directly to the school to be applied against the student's account. The school will receive the funds in two payments throughout the school year. All funds are to be used to pay for school expenses.Interest rate charges for PLUS loans are fixed at 7.9% and there is an additional 4% administration fee that will be deducted each time a disbursement is made.

Repayment Options

Parent borrowers may qualify for interest rate relief if they are members of the military. The interest rate may be capped at 6% in these cases, and the parent must request this relief from the U.S. Department of Education. Additionally, interest will be paid by the federal government (for up to five years) if the borrower is on active duty during war times or receiving special pay due to hostilities.

Payments must be made within 60 days of the first disbursement, although a deferment can be requested and if granted only the interest payments must be made (although these too can be capitalized if requested). Otherwise there are three repayment plans available: standard, extended and graduated. There are slight differences between these plans with amortization schedules from 10 to 25 years.

If you are having difficulty in paying back the funds under the terms of the loan agreement you can request forbearance or a deferment. In some rare cases, your loan may be canceled or forgiven completely. Under no circumstances can your parent loan be transferred to the student.

5 College Scholarships You Could Qualify For

According to US News and World Report, the cost of a four-year education at a private school is almost $30,000 per year and a four-year public school is nearly $20,000. With college inflation averaging nearly twice the rate of normal inflation, students and parents are searching for ways to pay for school without finding themselves too deeply in debt. Often, that comes from scholarships. There are some scholarships or grants available that are easier to get than others, even for students without extraordinary academic or athletic ability.

The Gates Millennium Scholars Program

The Gates Millennium Scholarship awards 1,000 minority students with graduation scholarships as well as personal and professional development. This scholarship is part of the Bill and Melinda Gates Foundation, a foundation started by Microsoft founder Bill Gates and his wife Melinda. It has awarded more than $614 million in scholarships as of 2010. Students must be nominated for the scholarship and complete the online application process in order to be eligible.

Federal Pell Grants

The federal government offers grants to families that can prove financial need. To be eligible for the grant, the student must complete the Free Application for Federal Student Aid (FAFSA). Awards normally fall between $100 and $4,000, but money is campus-based meaning that it will run out quickly. Complete the application as soon as possible. There are other government grants including the National SMART Grant and the Academic Competitiveness Grant.

The American Dream Scholarship

This scholarship, in partnership with the United Negro College Fund, is open to African American students with a minimum 2.5 grade point average. They have to meet Pell Grant eligibility criteria, which means that completing the FAFSA is necessary for this scholarship. Awards range from $500 to $5,000.

AAUW Educational Foundation Career Development Grants

The American Association of University Women offers a grant designed to help women who already have a college education by paying for graduate degrees or other training to progress in their chosen career fields. In the 2012-2013 school year, the AAUW will provide more than $4.3 million in funding to eligible women through 278 fellowships and grants.

Best Buy Scholarships

Best Buy will award $1,000 scholarships to more than 1,100 students living in the U.S. and Puerto Rico who will enter college after their high school graduations. To date, Best Buy has awarded more than $20 million in funds that have helped 16,545 students attend college. Selected students must demonstrate academic achievements, volunteer efforts and work experience.

Dell Scholars Program

The Michael and Susan Dell Foundation offers this scholarship based on the students' determination to find success through higher education. Only a 2.4 grade point average is required to apply for the scholarship, but students must have first participated in the Dell Foundation college readiness program.

General Advice

These scholarships and grants are offered to students all over the country. However, many organizations only award funds to a small amount of students. Sallie Mae offers this advice to students looking for scholarships:

First, don't rule yourself out. Even if you aren't a star athlete or an AP scholar, there are likely scholarships that could provide you with the funding you need. These are sometimes based on financial need, your degree program or your ability to write.

Second, apply for as many scholarships as you can. If you qualify, apply for the scholarship, but make sure you follow all applications instructions exactly. Late applications are usually discarded.

The Bottom Line

The cost of college continues to rise and that has left students and families wondering how they will pay for higher education. Scholarships probably won't pay for your entire college education but they can pay for a significant portion, leaving a much smaller amount for you to cover.

Can't Pay For Your Textbooks? Rent Them

One of the less talked about, but certainly pricey, aspects of attending college is buying the books. Sure, used books are an option, but limited inventory often makes these hard to snag. It's estimated that students will each pay anywhere from $1,000-2,000 in the 2010-2011 academic year, just on books and supplies. With those figures, renting textbooks is a trend worth trying. 

Renting: A Growing Trend

Though renting textbooks became part of the educational vernacular back in 2008, it's taken a while to go mainstream. Last fall, only 200-300 campus bookstores in the United States and Canada offered textbook rentals, according to the National Association of College Stores. This fall, 1,500 stores will offer rental programs. That's good news for college students, who stand to save up to 50% or more by renting rather than buying new textbooks. Those savings amount to hundreds of dollars per year.

So, the next question is: Where do students find these bargains? Aside from college bookstores, college books are generally provided by two traditional suppliers: Follett and Barnes & Noble. Another online option is Chegg.com. Below is the rundown on each.

Follett

When textbook rental was still in its inception, students had the option to either purchase books new or used, either in store or via CafeScribe, the company's electronic bookstore. Enter: Rent-A-Text, Follett's new textbook rental program. Offered online and in more than 750 bookstores, it carries a selection of more than 3 million textbooks. It estimates that 5 million students will use it for the 2010 academic season. Rent-A-Text could result in a total savings of $130 million.

The program can be accessed either on-campus at Follett bookstores, or by purchasing online. The process is similar to checking out a book out from the library. Students pay by cash, credit card, campus credit card or financial aid. Each book comes with a due date sticker. The due date is also printed on the receipt or packing slip, and an email reminder is sent to renters when the return date is approaching.

While there is no set period of time the book can be rented, Follett assures students on the Rent-A-Text site that the date "should give you plenty of time to glean an entire semester's worth of knowledge and carry you through finals." Of course, if you don't return the book, you will be charged for it. 

Barnes & Noble

Another source for textbook rental is through Barnes & Noble's website. Here, you can search for any textbook by title, author or ISBN. Barnes & Noble touts savings of up to 70% off the cover price, and has a 21-day, no questions asked, return policy. Students rent the book online, and shipping is free.

The duration of the rental period is clearly stated beneath the rented price of the book on the site. Similar to the Rent-A-Text program, you are charged for the book if you fail to return it within 15 days of the due date, or if the text is deemed "unusable" for another student.

Chegg.com

Claiming to be the "#1 source of college textbook rentals," Chegg.com rentals take place solely online. Features include a 14-day "any reason guarantee," "lightening quick" shipping and free UPS returns. The site allows students to sell their existing textbooks to the site for cash, and offers an interactive quote system for determining how much they will get for it. Chegg.com also positions itself as "green," by planting a tree every time a student rents.

The Bottom Line

Renting textbooks can offer significant upfront savings over buying new, regardless of where you buy. As long as students can maintain the self-discipline needed to ship the items back in a timely manner to avoid ultimately buying them anyhow, this just could be the wave of the future for college textbooks.

Students, Get More Bang For Your Textbook Dollars

When you go to your university bookstore, your eyes bulge out when you see the whopping $120 price tag on your textbook – and that's for a used book. With these prices, how do you keep your textbook expenses from approaching the cost of tuition?

Compare PricesYour school bookstore isn't the only place to buy textbooks. Look online and on student-posted fliers. Often, fliers line the halls in the building where your class is going to be held, and there are dozens of online venues across the internet where individuals can sell their textbooks person-to-person. Compare prices to those offered at the campus bookstore.

Buy E-BooksMany textbooks are available in a downloadable format for less money. Search for your book's edition online, and check the syllabus for your courses for online options.

Use Older EditionsWhile the current edition may sell for $100, last semester's edition now sells for $65. Ask your professor if older editions can still be used. Often, only a few changes were made from one edition to another, and if the professor doesn't assign homework involving questions that are only available in the newer edition, you are home free - and a little richer.

Sell Your Old Textbooks You may recoup much of your textbook money by selling your old textbooks online or directly to another student taking the course in a subsequent semester. This is because you cut out the middleman - the bookstore. For instance, if the bookstore is selling a used book for $75 and you sell it for $55, the buyer saves $20, which, incidentally, may be what the bookstore would have paid you for your used textbook.

Below are several tips for selling your used textbooks painlessly:

• Put all details in your flier or online ad. Just like you would want to know the edition, author and title are correct on the textbooks you buy, so does the buyer. Also, remember to add the ISBN, the identification number used to catalog books.
• Be realistic about the condition of your book. Don't say your book is in like-new condition unless there are no dents on covers, no highlights, etc. You will lose money if an item gets returned due to an inaccurate description.
• Compare online selling costs. Commission on online auctions is taken at sale only and is normally only a few dollars. Read the exact commission rates on the websites you are considering before choosing where you want to list your book. The lower the commission rate, the more you will make on your sale.
• Check shipping rates ahead of time. The last mistake you'd want to make is under- or overcharging for shipping. Go to the USPS website and input the approximate weight of your book in the Postal Price Calculator. Use any zip code in the U.S. in the box for where you are sending your item because the Postal Service's rates for sending packages via media mail - the cheapest way to send textbooks - is calculated based on weight of packages and not distance within the United States.
• Keep your ratings positive. When you sell regularly on one website, feedback is often posted. You want yours to be as positive as possible. Send an email when you ship your book, and ship your book within a week of when it is sold.
• Sell as soon as possible. Professors may use books for one semester or several years. You want to sell your textbook as fast as possible, in case your book will soon be out of use. But don't panic if your campus bookstore tells you there's a new edition of your old textbook the semester after you finish the course. Every campus is different, and someone from a different university may still buy your used textbook online.

CautionsWhen you are not ordering from your campus bookstore, you may experience delayed shipping, missing textbook accessories, such as CD-ROMS, or even receive the wrong book. Here's how to defeat all these online textbook traps to get a great deal and the right textbook - before your semester starts.

• Order your textbooks two to three weeks before your class starts, if possible. Look in the book-description area for signals that the person will ship your textbook quickly, like "ships fast," "ships within 48 hours" or "ships within three business days."
• Check online ratings before ordering. If the site you're looking at has ratings and feedback for the seller, read feedback carefully before choosing your textbook.
• Don't assume anything. There may be two books with the same title, so verify the authors and the editions with the department offices for all of your classes. If an online ad is unclear, email the seller questions to verify it is the book you want.

ConclusionYou have choices when it comes to buying and selling your textbooks. As is said about the stock market, buy low and sell high. If you follow this advice through four years of college, you may graduate having paid for the equivalent of only one or two semesters' worth of textbooks for your entire four-year college career.

5 Unique Ways To Make Extra Money In College

When it comes to being broke, no one plays the role better than a college student. Whether they make a four-course meal out of Ramen noodles or carpool with a headcount of seven people, students always try to figure out the best way to make the most of what they have.

But scrounging for cash between the cushions or flat-out being broke doesn't have to be a way of life. In fact, there are many ways for college students to make money. With a little creativity, mostly by selling services to classmates, students can stand to make considerable cash for their savings fund.

5 Business Ideas for College Students

College students are believed to live a crazy dorm life with wild parties, and brief moments of intellectual stimulation. For the most part, these assumptions are correct. But one thing some students don't account for is the lack of cash flow they'd experience when attending a university.
Students who need more cash but can't think of ways to make extra money while attending class, can turn to these five business ideas for college students that may help pull in additional income.

1. Become A Tutor

Those gifted in a particular subject like it math, science or English could offer their wealth of knowledge to students in the form of tutoring services. Keep in mind that some colleges and universities offer tutoring services for free, so consider expanding your services through the internet.

2. Style Or Cut Hair

Talent hair stylists who live in a small college town where great hair professionals are hard to find may be able to make a killing as an in-house stylist. Find out what college buddies pay at their current stylist, then charge a little less. Even better, consider sweetening the deal by stopping by their dorm rooms to provide the service.

3. Write Online

Writing online for a living is completely possible, particularly for a college student who doesn't necessarily need the cash to make ends meet. Students with a love for writing, can take time to explore writing opportunities available as a freelancer.

4. Clean Fraternity And Sorority Houses

Members of major fraternities and sororities often live in huge houses near their college campuses. With so many members living in one place, there's no doubt that these houses could use a good scrubbing. One of the ways to save money and earn some extra cash, is to set up a little cleaning business with a specialty in Greek houses.

5. Sell Class Notes

Avid class attendees and organized note-takers can do their classmates the great service of sharing lecture notes with other students. Consider selling class notes to students who don't feel like showing up. You might be surprised by the number of students who are willing to pay for your valuable information.

Saving Money In College

Being in college is all about experimentation, ingenuity and growth. What better way for a student to grow their bank account funds than to start a business and learn their entrepreneurial potential in the process?
By examining passions and taking a look at where talents lie, college students may become one of those lucky college-grown entrepreneurs (does Mark Zuckerberg ring a bell?) who builds such an amazing enterprise in college that it extends into a well-paying job after graduation. If nothing else, students can earn extra cash to avoid being a starving college student.

Tuition Insurance: Worth It Or Waste Of Money?

In the United States, a year of university studies can easily cost tens of thousands of dollars. For parents who are paying for the bulk of their students’ educational costs, this can amount to a hefty sum. The financial burden becomes particularly acute if the student proves unable to finish his or her studies during a particular school year. In such a case, parents may end up with a large amount of debt and nothing to show for it. To protect against such situations, some educational institutions and insurance companies offer tuition insurance – also called tuition refund insurance. This insurance reimburses some or all of the student’s tuition if he or she is unable to finish the term for a reason that is covered in the policy. In some cases, purchasing such coverage can be a wise financial move. However, it is not for everyone. Read on to find out if you should consider purchasing a tuition insurance policy.

Types Of Coverage

Different companies and policies offer different types of tuition insurance coverage. The most common area of coverage is death or withdrawal for health-related reasons. Because of this, the situation in which it makes the most sense for a student or parent to purchase tuition insurance is when he or she has some sort of illness that could become serious during the term of study resulting in an inability to finish. Since most university-age students are quite healthy, though, such coverage does not make financial sense for most students. Some policies also provide coverage for instances in which the student cannot finish the term due to disciplinary action. However, since the risk of being unable to finish due to disciplinary action is usually something completely under the control of the student, parents should not worry about this type of coverage unless their children have exhibited a tendency toward doing things that could result in such action.

Coverage Amount

Some universities in the United States cost more than others. Students studying at public universities in their home states tend to pay relatively low tuition while students studying at top-ranked private universities tend to pay relatively high tuition. When the total amount of money being risked is higher, it makes more sense to insure that sum. Some policies cover the entire amount of tuition while some require a copay of between 10 and 40 percent.

Mental Vs. Physical Coverage

While tuition insurance typically covers students who withdraw for reasons related to both mental and physical health, the coverage for both circumstances tends to be different. For instance, a policy that covers 100 percent of tuition in the case of withdrawal for reasons related to physical ailments may only cover 60 or 75 percent of tuition for withdrawals resulting from mental disorders. It may also make strict stipulations about such mental disorders. For instance, it may require that the claimant must have spent a certain amount of time in the hospital as a result of the disorder.

Cost

The cost of tuition insurance coverage varies according to the company, coverage amount, type of coverage and background of the individual who is covered. It usually ranges between 1 and 5 percent of the total amount of tuition covered.

Existing Refund Policies

In some cases, a tuition insurance policy may be unnecessary because the university already offers a satisfactory refund policy. Some universities will reimburse tuition in full if the student passes away during the term. This might also apply to withdrawal due to medical reasons. Other universities offer tuition refunds on a sliding scale depending on how far the student got into the semester. Before signing up for a tuition insurance policy, research your university’s existing refund policy to make sure that you are not wasting your money.

Claim Rates

According to an article by the Wall Street Journal, universities report that the amount of students who make claims on tuition insurance policies versus the total number enrolled in such policies is only about 1 or 2 percent. For this reason, it is clear that the actual risk that students face of needing such insurance may actually be rather low.

University Involvement

In some cases, universities openly encourage students and those supporting them to purchase tuition insurance. They may qualify these suggestions by saying that the insurance is being provided by a third party and that they do not get a cut of the premiums collected. However, even though they do not usually profit from the premiums, universities do usually benefit directly when students who withdraw have such insurance. This is because, if the student owes money or has a scholarship, the university collects that value directly from the insurance company before anything goes to the beneficiary of the claim. For this reason, universities may sometimes exaggerate the need of such insurance because it is a no-cost way of protecting their own interests.

Alternatives

When it comes to the risk of death, a more viable alternative to tuition insurance may be life insurance. Life insurance policies can often provide a higher level of coverage with fewer constraints. As for concerns of withdrawal due to medical reasons, most financial advisors feel that tuition insurance is not a worthwhile investment unless you feel that there is a high possibility of this happening. Otherwise, it may be better to simply save your money.
It is important to do all of your homework before purchasing a tuition insurance policy. Make sure that you carefully weigh the pros and cons before making a final decision.

Tuition Reimbursement: Tax Policies And Benefits

When people gain a higher level of education and learn important skills, their ability to contribute to society becomes greater. For this reason, both companies and governments often provide programs that support the attainment of higher education. One such program that they may employ is tuition reimbursement. In the United States, various tax policies have been made that encourage working people to go back to school and encourage employers to reimburse employee tuition.

Basics Of Tuition Reimbursement

When a company adopts a tuition reimbursement policy, it essentially tells all of its employees that, if they enroll in qualifying educational programs, the company will help pay the tuition costs for those programs by reimbursing employees for part or all of what they spend. Unlike a scholarship program, a tuition reimbursement program does not require a complicated application process, and it is not rewarded only to a limited number of individuals. Rather, a tuition reimbursement program is available to all employees who meet certain criteria.
For instance, a company may require that employees receiving tuition reimbursement work full-time, have a certain amount of time with the company under their belts, agree to stay with the company for a minimum amount of time in the future, and enroll in certain types of courses. A company may be hesitant to help employees pay for degrees in literature or archaeology, but that company may be happy to help employees pay for graduate programs in business, engineering, or information technology.

Employer Tax Benefits

For employers, the benefits of providing employees with tuition reimbursement are not limited to the employee’s increased ability to contribute to the company. To a certain extent, employers can deduct the money spent on tuition reimbursement from their taxable income. While this is also true for normal worker wages, which are deducted as business expenses, normal worker wages do not usually lead directly to a more highly skilled workforce.
When companies work the numbers well, they can often use tuition reimbursement tax policies to invest in human capital without cutting net profits at all. However, there is a limit: as of the time this article was written, employers are generally limited to $5,250 per employee per year. Beyond that point, employers of course can still issue tuition reimbursements, but such reimbursements must meet special requirements to qualify as tax deductions.

Employee Tax Benefits

The tax benefits of tuition reimbursement are not limited to the employer. While the employee who receives a tuition reimbursement is essentially getting a pay raise, it is an untaxed pay raise. The amount an employee receives from an employer in this way is not even included in the “wage, tips, and other compensation” of his or her W2 form; it is a benefit that the Internal Revenue Service does not count as taxable income at all. As long as an employee’s reimbursement meets the criteria to be a deduction for the employer, it also meets the criteria to be untaxed income for the employee.

An Exception: Working Condition Fringe Benefits

While tuition reimbursement is limited to $5,250 per employee per year as a general rule, there are exceptions. If the tuition reimbursement can be counted as a working condition fringe benefit, it can exceed the $5,250 limit and still go untaxed. A working condition fringe benefit is anything that an employer gives to an employee expressly for the purpose of making the employee able to do his or her job.
For instance, if an employer provides a cellular telephone for an employee because it is an indispensable tool for everyday business, it is a working condition fringe benefit. When it comes to tuition reimbursement, if the education that the employee seeks is absolutely necessary when it comes to performing the employee’s fundamental duties, it counts as a working condition fringe benefits. For instance, tuition assistance for an EMBA program usually cannot exceed the limit and remain untaxed, but tuition assistance for a professional licensing or certification program usually can exceed the limit and remain untaxed.

Course Limitations

Not every course of study can qualify for a tuition reimbursement. While reimbursements that stay below the limit do not have to apply specifically to the job of an employee, they do generally have to increase the employee’s job-related qualifications to some degree. For instance, tuition reimbursement for a foreign language program can usually count, regardless of one’s job. However, reimbursement for a class that is for a hobby or sport usually does not count unless it is part of a degree program or applies specifically to the employer’s business operations.

Expense Limitations

Tuition reimbursement can only be used to cover specific education-related expenses. This means tuition, enrollment fees, and textbooks. It cannot be used to pay for food, lodging, clothing, vehicles, or other items, even if the expenses are incurred as a direct result of the educational course.

Bottom Line

The provision of tuition reimbursement is completely up to the employer. Some companies provide it, while others do not. Some companies may be willing to provide it, but do not make a practice of it because they do not have large numbers of student employees. If you are working and attending school, consider asking your employer for a tuition reimbursement. If you present a clear argument, laying out the benefits that you will bring to the company by gaining a higher level of education, your employer just might approve it.

Free Government Grants For College Education

The investment needed to pay for a college education, while often worthwhile, tends to be an expensive one. To help finance this expense, many prospective students and their families apply for grants. A grant is money that does not have to be repaid as long as it is used for the intended purposes as designated by the grantor. A common source for college education grants is the government – at the federal, state, or local levels. However, to access them, students and those funding their educations must go through the necessary steps. The requirements and methods of application differ depending on the specific grant program. This article will go over how to apply for two popular federal government grants for higher education funding: the Pell Grant and the SMART Grant.

Eligibility Requirements For Federal Grants

To qualify for the Pell and SMART grants, you need to meet these five criteria:

Fill Out The FAFSA: The FAFSA (Free Application for Federal Student Aid) is an application that all individuals seeking federal student aid must complete. It helps the government to judge whether or not you qualify for aid. In addition to serving as an application for the basic Pell Grant, this form also stands as a gateway to various other government-funded financial aid programs.

Legal Status: To be considered for federal financial aid, you must either be a U.S. citizen or an eligible non-citizen. Eligible non-citizens are U.S. nationals and aliens who have I-151, I-551 and I-551C Permanent Resident Cards. You must also have a valid Social Security Number.

Educational Achievement: To be eligible for federal aid, one of the following must be true for you:

• You have a high school diploma.
• You have a GED.
• You have already completed at least six credit hours of study toward earning a qualifying post-secondary certificate or degree.

If none of these apply to you and you are time-pressed to get funding for school, the simplest way of meeting this requirement would be to try to get your GED.

Enrollment: To receive any kind of government financial aid, you must be enrolled at an accredited university or college. Some think that they must secure all funding before enrollment, but this is a mistake. Only after your enrollment at such an institution is confirmed can you receive government grants to help you pay for your college costs. The amount of money you receive depends in part upon how many credits you are taking. A part-time student cannot receive the same amount of funding as a full-time student.

Other Factors: If you are currently delinquent on student loans provided by the government, you cannot qualify for more financial aid. To overcome this, you must get up-to-date on your outstanding loan payments. Outside of possibly letting you qualify for grants, doing so can also help to temporary alleviate your monthly debt payments, as going back to school can sometimes allow you to put your monthly payments on hold. Another disqualifying factor can be criminal conviction on drug-related charges. However, you can overcome this disqualification through mediation and by providing evidence of reform.

The Pell Grant

The FAFSA is intrinsically an application for the Pell Grant, which is the basic government grant that post-secondary students in the United States receive. Therefore, once you fill out the FAFSA, you will automatically be considered for the Pell Grant. As of the 2011-12 school year, the maximum amount an individual may receive in Pell Grant funds is $5,500. According to ed.gov, “The amount depends on your financial need, costs to attend school, status as a full-time or part-time student and plans to attend school for a full academic year or less.”

Satisfactory Academic Progress: In order to continue qualifying for the Pell Grant, you must exhibit satisfactory academic progress toward earning your degree or certificate. If you fail too many classes, you may be disqualified for future grants on academic grounds. The specific requirements for academic progress are set by your school. To ensure that you remain in good standing, study diligently and do not fail your classes. If you are disqualified from receiving government grants due to poor performance but continue with your studies anyway, an improvement in performance can help you to receive grants again in the future.

Use of Funds: Part of the FAFSA form is a personal statement in which the applicant must agree to use grant funds to address expenses related to education, such as tuition, school fees, books, etc. In most cases, Pell Grant funds can be used to pay for things like food and rent as well.

Financial Need: One of the requirements for receiving a Pell Grant is that you must exhibit significant financial need. The following items are key aspects of this assessment:

Household Status

• marital status
• number of dependents
• number of family members attending qualifying educational institutions

Income

• personal income
• spouse’s income
• parents’ income

Assets

• personal assets
• spouse’s assets
• parents’ assets

SMART Grant

The SMART Grant is a federal grant program that the Department of Education offers in addition to the Pell Grant. Unlike the Pell Grant, which is mostly need-based, the SMART Grant is based on academic performance and on the student’s course of study. Qualifying courses of study include various science, technology, engineering, mathematics and critical foreign languages. To receive SMART Grant funds, students be enrolled in a qualifying course of study at an accredited university and must maintain a GPA of at least 3.0 on a 4.0 scale. As of the 2011-12 academic year, students may receive up to $4,000 in grants from this program during their third and fourth academic years.

Federal Grant Disbursement

If the federal government decides that you are eligible to receive a federal grant, it does not send you the money directly. Rather, the government sends the money to your school which may either automatically apply it to what you owe for tuition, fees, etc. or give the money straight to you.

State Grant Programs

In addition to the grant programs offered by the federal government, states also offer funds to help students pay for university educations. The specific requirements and funding methods of these programs differ from state to state and program to program. However, most of them use the FAFSA as a starting point and look at whether or not you have already received federal grants.
If you are starting to plan for your or your child’s college education, you should take a look at both the Pell and SMART grants. Additionally, you should take a look at your state’s website for state specific grants. Doing your homework ahead of time will help you to make the cost of college education more manageable for you and your family.

The Benefits And Costs Of Attending A Community College

With the cost of college tuition rising sharply in the past decade, more and more students are looking to get the most out of their educational investment without going into serious debt. Community college offers one option that could save students money. However, there are potential trade-offs when it comes to the reduced price of attending community college. Any student considering community college should carefully weigh the benefits against the costs to decide if it’s the right option to pursue.

Benefits Of Attending A Community College

There’s one glaringly obvious benefit to attending community college: cheap tuition. According to FastWeb.com, at many community colleges, tuition costs less than half of the cost of tuition to a public four-year university and one-tenth of the tuition at a private four-year university. This is a huge monetary benefit, but there are definitely a few other great perks of community college to consider. These include:

• No Room And Board Expenses: One of the expenses that many students overlook when considering four-year universities is room and board. This expense can cost several thousand dollars each semester, and that’s in addition to tuition. When going to a community college, students generally live at home or on their own, so room and board doesn’t even factor into the costs. That can add up to significant savings every year.
• Two-Year Degrees: Many community colleges offer shorter programs for certain academic areas, usually in the form of two-year associate’s degrees. That means that a student in one of these programs will be saving on tuition in two ways. First, they’ll spend less by attending a community college instead of a four-year university. Second, they’ll be in college for half the time if they decide to pursue an associate’s instead of a bachelor’s degree.
• Reduced Transportation Costs: Students may also save money on transportation by attending a community college rather than a four-year university. Since these schools are often located close to the student’s home, they won’t have to travel as far as they might have to as a commuter student to a larger university. Even students who live on campus at a four-year college may still spend more when they have to fly or drive home long distances over breaks and holidays.
• Ability To Gain Transfer Credits: For students who want to pursue a bachelor’s or a master’s degree, they can still save a lot of money on tuition by getting some of their general credits out of the way at a community college. In many cases, students are able to complete about two years of a four-year degree at a community college and then transfer over to a university to finish their degree. For those who take this route, it’s critical to communicate with the university they hope to attend to make sure the courses they are taking will transfer over for credit.
• Less Student Debt: Community college students pay significantly less on tuition than students at a four-year university so they tend to graduate with much smaller student loans (or no loans at all). For many students, this can end up saving them thousands of dollars in student interest in the long run.

Costs Of Attending A Community College

While community college is a great value in many ways, there are a few costs that need to be considered, including:

• Tuition: Just because community colleges are cheaper doesn’t mean that they are for everyone. These schools still charge as much as two thousand dollars per semester in tuition so it’s important for students to consider whether they can afford this cost or if they will need student loans.
• Limited Degree Offerings: Community colleges don’t have as many degree offerings as a university, and most offer two-year degrees rather than a four-year degree. Students need to research whether a two-year degree will be sufficient in the field that they wish to pursue. For students who find out that they need to get a four-year degree for the job they want, the best option for saving money is to find out if they can use a community college to obtain transfer credits for the first year or two.
• Limited Campus Life: There are other perks that community college students miss out on such as an active campus life. At community colleges, sports, student organizations, fraternities, sororities and other activities are scarce. Some students simply don’t want to miss out on these activities. However, it’s also important to consider if campus life should be part of your investment in your education. For example, some students want to get involved with leadership roles in various groups or clubs in order to build their resume. If this is an important part of your educational investment, then it may be worth it to attend a four-year university instead of a community college.

Community college can be a wonderful option for students to get a good education without going deep into debt. However, it’s important to think about more than just which school is the cheapest to attend. Students should consider all of the above factors when making a decision about how to invest their money in their college education.

6 Tips On How To Save Money For College

Saving money for college is an important priority for many parents. However, there is a lot of conflicting information available on the topic and many parents do not know what the best course of action is to get started with an effective college savings plan for their child. The bottom line is that the most important thing to do is to start saving now. The sooner that parents start saving for their child’s college education, the better off they will be when the time comes to send their child off to college. Here are some tips and strategies that can help you start saving for your child’s education now.

Consider A 529 Savings Plan

529 Savings Plans are state or educational institution-operated savings plans that allow parents to save for their child’s college education through a variety of investment vehicles. They are run similar to 401(k) retirement plans and are available in almost every state (however, some plans are no longer accepting new participants).
The major benefit to a 529 plan is that the investment earnings in the account are not taxed as long as they are used to pay for qualified educational expenses. Another benefit is that 529 Savings Plans do not have any restrictions on age and they have no income limitations. Additionally, there are no restrictions on the amount of money that parents can invest in the plan. Keep in mind that these plans do charge management fees, which can directly affect the overall return rate. Also, like 401(k) plans, 529 plans can lose money if the investments held perform poorly.

Consider A Coverdell Education Savings Account

The Coverdell Education Savings Account is another type of savings account that parents can use to save for their child’s college education. Like a 529 plan, money placed into the account is invested across different investment vehicles. All money that is withdrawn to cover qualified educational expenses is not subject to taxes. Unlike the 529 Savings Plan, the Coverdell Account allows money to be used for elementary and secondary schooling as well. However, there are yearly restrictions on the amount of money that parents can place in the account and there are income restrictions. Additionally, all money placed in the Coverdell Education Savings Account must be used for educational expenses before the beneficiary reaches 30 years of age. Alternately, the funds can be transferred to another family member who meets the age requirements. Parents may choose to transfer funds in order to avoid taxes and penalties.

Don’t Put Too Much Money In Your Child’s Name

Putting too much money in your child’s name can backfire when it comes time to seek out additional college funding sources. If you put all of your college savings in an account that is in your child’s name, it could decrease the amount of financial aid that is available to him or her. Therefore, you might want to consider putting the money in an account under your name.

Look Into Automatic Monthly Withdrawals

Regardless of the college savings plan that you choose, one of the best ways to ensure you continue to grow the fund is to opt for automatic monthly withdrawals from your bank account. This method of savings is easy and carefree, and eliminates missed contributions if you forget to fund the account one month.

Cut Extra Spending

Saving for college can be a daunting task, especially for parents of multiple children. Many parents struggle with finding the extra money to save. But by employing basic savings strategies and cutting back on extra expenses, even the most cash-strapped parents can start saving for college. Many individuals don’t realize that the little daily expenses add up to a decent chunk of change at the end of the month. Simple ways to cut extra spending include:

• Prepare more meals at home and eat out less.
• Skip the daily $4 lattes at expensive coffee shops and brew coffee at home instead.
• Instead of taking the family out to see a movie, have a movie night at home. Rent a movie or order one online or through your cable provider.
• When you do take a trip to the movies, opt for the matinee showing, which can be as much as half off the normal price.
• Cancel subscriptions that you don’t use, such as gym memberships and membership websites.
• Watch items that you want to purchase and wait to see if they go on sale. Why pay full price for an item that you can get later on for a fraction of the cost?
• Carry cash instead of debit cards. Allocate a certain amount of money for extras each month and when the cash runs out, it’s gone.

Make Extra Money On The Side

Making some extra money that can be put away for college is an effective way for parents to start saving. There are dozens of ways for parents to make some extra money on the side. From getting a part-time job to selling unwanted items, parents can supplement their income in a variety of ways. Some examples include:

• Turn your hobbies, interests or skills into extra cash. Consider providing a service such as tutoring, singing lessons, teaching a second language or becoming a yoga instructor. If you have a talent that others will pay to learn, you can make your own hours and start sharing your skills with others.
• Offer your domestic skills for a fee. Housecleaning, pet-sitting, lawn cutting, babysitting and providing companion care to the elderly can help bring in extra income.
• Sell unwanted stuff on e-bay or Craig’s List. Clean out the garage and empty out the attic. Get rid of unused items that are just taking up space.
• Have a yard sale to get rid of any items that do not sell on e-bay.
• Bring your gently used clothing, children’s toys, books and household items to a consignment shop. They will sell your goods at a discount rate and you will earn a portion of the sale.

Keep these saving tips in mind when you sit down to plan your college savings strategy. If you are unsure about a particular type of investment, consider consulting a financial adviser for advice.

Best Financial Aid For Graduate School

If you’re interested in pursuing a career in a specialized field, you will likely need to complete an advanced degree at the graduate or doctorate level. While a graduate degree can provide you with the additional education, training and skills necessary to be successful, it can also be expensive. For many students, the financial aspects of obtaining a graduate degree can be a major obstacle to their education. Prospective graduate students can use the following tips to find the best financial aid resources to help make their educational and professional dreams a reality.

Assessing Your Need

The first step in finding the best graduate school financial aid is to know how much money you’re actually going to need to complete your education. Start by making a list of all the expenses you expect to pay while you’re in school. The most obvious costs will be those related to tuition, books, fees and equipment. However, you should also calculate the cost of your living expenses, including your rent, utilities, food, transportation costs, insurance, etc. to determine how much money you’ll need to live on a monthly basis. If you plan to work while you’re in school, your income may cover any expenses not directly related to your education.
You should also make a list of your existing financial resources. This may include certificates of deposit, an education savings plan such as a 529 account or a Coverdell Education Savings Account (ESA), education savings bonds, stocks or mutual funds. This includes assets owned by you and those established for you by your parents, grandparents or other relatives. Once you have a clear picture of what your estimated expenses are versus your existing financial resources, you can begin to explore the various avenues for funding your education.

Student Loan Funding Options

If you find that you lack sufficient resources to cover the cost of your tuition, books, fees and other expenses, you may consider borrowing money to pay for your education. Student loans are available from the federal government, as well as private lenders. The federal government offers a variety of loan options for graduate and professional students, including subsidized and unsubsidizedStaffordloans, Perkins loans and Direct PLUS loans. In order to apply for these loans, you must complete the Free Application for Federal Student Aid (FAFSA) to determine how much aid you’re eligible to receive. A separate application is required for the Direct PLUS loan.
If you don’t qualify for federal student loan funding or your aid package doesn’t cover the full cost of attendance, you can also consider private student loans. Private student loans are offered through numerous banks and lenders, including Sallie Mae, Chase and Citibank. While private student loans can supplement any gaps in your education funding, it’s important to note that these types of loans typically carry higher interest rates than those offered by the federal government. In addition, private student loans are not eligible for federal income-based repayment programs.

Finding Scholarships And Grants

Searching for scholarship and grant funding should be a top priority for every graduate student, since this type of financial aid typically does not have to be repaid. Scholarships and grants in certain fields, such as nursing or teaching, will sometimes require the recipient to complete a specific period of employment or service as a condition of the award. When searching for scholarship and grant opportunities, it’s important to start with your prospective school first. Depending on the type of program you’re enrolled in, you may be eligible to apply for fellowship funding. In many cases, fellowships will cover the cost of your tuition, books and fees while also providing a small monthly living allowance.
Scholarships and grants are available from a wide range of organizations at the local, state and national level. While national scholarship and grant programs tend to be the most generous, they also tend to be the most competitive. When searching for funding, look for opportunities that fit your background, academic achievement and field of study as well as general scholarship opportunities. For example, specialized scholarships and grants are available for minority students or students pursuing degrees in certain fields, such as nursing, education and engineering. You should also research funding opportunities through organizations in your area, such as military veterans’ organizations, small business associations or charity groups.

Alternative Ways To Pay

In addition to scholarships, grants and loans, there are several other alternatives to find graduate school funding. If you’re working, you may consider asking your employer about education assistance or tuition reimbursement programs. These programs pay for some or all of your education costs on the premise that you’ll use the education and skills you acquire in order to benefit your company. If you’re not employed, a paid internship can help you gain valuable work experience in your field in addition to covering some of your education costs. You may also consider pursuing assistantship programs through your school. These programs typically provide some amount of tuition remission, along with a monthly stipend and insurance coverage in exchange for working as a research assistant, teaching assistant, administrative assistant or resident housing assistant on-campus.
While securing funding for graduate school can be challenging, the financial and emotional rewards associated with pursuing a career you enjoy can make it worthwhile. Taking the time to research every possible financial aid opportunity can ensure that nothing stands in the way of your scholastic and professional goals.

Saving For College With A Coverdell Education Savings Account

Coverdell Education Savings Accounts, once known as Education IRAs, are trusts created to help pay for qualified education expenses.

Most people create Coverdells to help pay for college tuition and fees, but it’s not widely known that they also can be used to pay for elementary and secondary school expenses.
In this article, we’ll cover the basics about the Coverdell to help you determine if you want to use one to help pay for future education expenses.

What’s The Origin Of The Coverdell ESA?

It was established by the Taxpayer Relief Act of 1997 and then expanded by the Economic Growth and Tax Relief Reconciliation Act of 2001.

How Does It Work?

A lot like a Roth IRA. Both allow you to make an annual non-deductible contribution to an investment trust account. The money grows free of federal income taxes, and if all goes as planned, withdrawals from the account will be completely tax-free as well. Of course, the big difference is the Roth is for retirement and the Coverdell is for education.

How Much Can I Contribute Per Year To A Coverdell And How Long Can I Make The Contributions?

You can make a maximum contribution of $2,000 per beneficiary until the student reaches age 18. (There are no age limits for students with special needs.) The contribution limit was raised from $500 in 2002, the same year that K-12 expenses were allowed to be covered.

$2,000 Is Better Than $500, But It’s Still Not A Lot.

That’s right. The low limit means your overall investment return can be affected by even a small annual fee charged by the institution that holds your Coverdell. So be sure to ask about fees before you open an account.

Who Owns Coverdell Accounts?

The student or the student's parent can have account ownership.

How Long Do I Have To Use The Money?

Until the student reaches age 30. Any earnings not used by then will be taxed as ordinary income. The account owner will also face a 10 percent penalty on the funds.

Are There Any Ways Around The Taxation And Penalty?

Yes. You can roll one Coverdell account over to the Coverdell account of a family member of the student who didn’t use the money.

Is There An Income Limit?

Yes. If you earn more than $110,000 for a single filer or more than $220,000 for a couple filing jointly, you can’t open an account.

Is There Any Way Around The Income Limit?

Yes. You can make monetary gifts to the student and have the student make the contributions. But if you do, it counts as an asset and will make it harder for the student to receive need-based financial aid. If the parent makes the contributions, it has practically no impact on financial aid. Another way around the income limit is to have a company, including a tax-exempt organization, contribute to someone’s account. It doesn’t matter if the company is Apple or Joe’s Junk Shop.

Tell Me More About The Tax Advantages.

Contributions to a Coverdell aren’t deductible for federal or state income taxes, but earnings in the account accumulate tax-free. Qualified distributions are exempt from federal income tax. But if you withdraw money and don’t use if for qualified expenses, it is taxed at the donor’s marginal tax rate, plus a 10 percent penalty. The exception is if the student dies or becomes disabled. In those cases, non-qualified distributions remain tax free.

What Is A Qualified Expense?

Elementary, secondary and college expenses, including tuition, fees, tutoring, books, supplies, related equipment, room and board, uniforms, transportation and computers.

Can I Contribute To A Coverdell And A 529 College Savings Account In The Same Year?

Sure, but make sure you don’t exceed $13,000 or you could face unpleasant gift tax implications.

Can I Claim Education Tax Credits And Withdraw Money From A Coverdell In The Same Year?

Yes, but the tax credits must be used to pay for different qualified expenses than the Coverdell.

What’s The Biggest Downside To A Coverdell?

Well, that’s debatable, but if the student doesn’t use the money for qualified education expenses, the money is eventually distributed to the student, unlike a 529 plan, which returns the money to the parents or contributors. Some don’t like that the Coverdell must be used by age 30 or it is subject to taxes and penalties. And coordinating withdrawals with other tax benefits, especially the Hope or Lifetime Learning credits, can be tricky.

Anything Else To Worry About?

Well, yes. Unless Congress acts, certain education savings account benefits will expire after 2012. K-12 expenses will no longer qualify. The annual contribution limit will return to $500. And withdrawals will not be tax-free in any year in which a Hope credit or Lifetime credit or Lifetime Learning credit is claimed for the beneficiary.
Like just about any investment product, the Coverdell isn’t for every family. There are pros and cons, and you should have all of them explained to you by a financial adviser or other professional before making the decision to open an account.

The Pros And Cons Of 529 Prepaid College Tuition Plans

With college tuition costs steadily increasing, more and more parents are turning to 529 plans to save for their child’s higher education expenses. 529 plans come in two distinct varieties: savings plans, which allow you to enjoy tax-free growth from your investments and prepaid tuition plans, which allow you to purchase college credits for future use at a locked-in rate. Parents who are considering a prepaid tuition plan should carefully weigh the pros and cons to determine if it’s the best investment choice for their child.

529 Prepaid Tuition Plans: The Pros

Pro #1 – More Bang For Your Buck
When you purchase tuition credits through a prepaid plan, the price is guaranteed for as long as the plan is in operation. This means that when it’s time for your child to go off to college, they’ll likely be paying a much lower rate for tuition compared to their classmates. According to FinAid.org, the average cost of tuition increases roughly 8 percent per year, with some colleges raising costs as much as 10 to 30 percent in any given year. By prepaying your child’s college costs now, you ultimately get more value for your money.

Pro #2 – Shielded From Market Volatility
529 savings plans are similar to retirement plans in that you invest your money in the stock market, typically in the form of mutual funds. When the market is up, you see a gain but when stocks fall, so does your plan’s value. With a prepaid tuition plan, the value of your investment corresponds to the amount of credits you purchase, rather than fluctuations in the market. While the assets in a prepaid tuition plan are pooled and invested collectively, ultimately, they carry a much lower risk than other types of investment vehicles.

Pro #3 – Tax-Advantaged
Parents who invest in a 529 prepaid tuition plan will also enjoy tax-free growth of their investment as long as the funds are used to cover qualified higher education expenses. According to the IRS, qualified education expenses include tuition, books, fees, room and board and equipment. This means that as long as you’re using the money for qualified expenses, you won’t owe Uncle Sam anything if the value of your investment increases over time. In addition to enjoying tax-free growth, some states may also allow you to deduct a set amount contributions on your state income taxes each year.

Pro #4 – Low Maintenance
Starting a 529 prepaid tuition plan typically requires completing a minimal amount of paperwork and setting up your regular automatic contribution plan. You don’t have to worry about choosing specific investments or monitoring your account for gains or losses. Prepaid plans eliminate much of the stress and confusion associated with other types of college savings accounts.

529 Prepaid Tuition Plans: The Cons

Con #1 – Limited Availability
One of the biggest problems associated with 529 prepaid tuition plans is that they’re not offered in every state. According to the Wall Street Journal, only 18 states currently offer some type of prepaid tuition plan. While most states allow you to invest in a 529 savings plan regardless of where you live, prepaid tuition plans are typically limited to residents of the state in which the plan is offered. In addition, some states that maintain prepaid plans are no longer accepting new participants.

Con #2 – Transferability
Prepaid tuition plans are designed to be used at public colleges and universities in the state where the plan is administered. While some plans may allow students to transfer these credits to out-of-state schools, not all of them do. Although you may be able to cash in your credits for use at a nonparticipating school, your state’s plan may limit the amount of profit you’re able to realize on your initial investment. Credits purchased through the Private College 529 plan, which allows parents to purchase tuition credits at approximately 270 private colleges and universities, may also only be used at those participating schools.

Con #3 – Not All Prepaid Plans Are Guaranteed
The basic premise of a prepaid tuition plan is that once you purchase the credits, you don’t have to worry about paying more for college if tuition prices increase. Funds contributed to a prepaid tuition plan are pooled and invested and the state uses returns from these investments to make future tuition payments at the locked-in rate. Not all states, however, guarantee that they will be able to make tuition payments on time. If there are not enough funds to cover tuition payments when it’s time for your child to go to college, the state may choose to refund your initial investment less any gains. According to Mint.com, just six states, includingVirginia,FloridaandMassachusetts, currently offer guaranteed prepaid plans.

Con #4 – Impact On Financial Aid Eligibility
Another consideration for parents is how assets held in a prepaid tuition plan may affect their child’s financial aid eligibility. Generally, prepaid tuition credits are treated as an asset of the parent and must be included on the FAFSA when calculating federal aid eligibility. As such, they can potentially affect how your child’s EFC (Expected Family Contribution) is calculated, making them eligible for fewer loans or grants. If your child applies for school-specific funding, such as work-study or school-based grants, any amount they qualify for may also be reduced in proportion to the amount of prepaid tuition credits available.
Like any type of investment vehicle, prepaid 529 plans have their advantages and disadvantages. When considering your options for funding your child’s future college expenses, it’s best to look at the full range of savings methods available to find the one that best fits your needs and expectations.

How To Buy College Textbooks On The Cheap

Textbooks are an expensive necessity of a college education. In fact, the experts at The College Board estimate that a student will spend nearly $1,200 a year on books and course materials at a four-year public university. However, there are ways to reduce the cost of college textbooks for savvy consumers willing to spend some time looking for the best deals. In this article, we’ll examine several different places that you can shop to save money on college textbooks. We’ll also give you some tips on how to recoup some of the costs you spend on college textbooks.

Where To Shop For Your College Textbooks

The Student Store
Generations of college students have relied on the campus bookstore for buying new textbooks and cashing in on old textbooks. Campus shops still specialize in selling books, although students now have a wider world of options available. The bottom line is that it’s probably a good idea to shop around online before buying your books from the campus bookstore. The same advice goes for selling your old textbooks.

Online Book Sellers
The large online booksellers who sell everything from New York Times bestsellers to children's picture books also sell college textbooks. These e-tailers include the online marketplace Amazon and AbeBooks, which searches the inventories of more than 13,000 booksellers. Ebay, the auction site, also has textbook listings.

Online Textbook Specialists
There are many online sites that search across the web for multiple options in textbook purchases and rentals. You punch in the name of the book and the search engine finds available copies and price points for new books, used books, rentals and digital editions.

Rental Textbooks
Students don't have to always purchase books. There are websites that offer rental options and some bookstores in college towns also offer the same service.

Electronic Textbooks
Electronic versions of textbooks are a developing market.
Some online retailers offer electronic textbooks with features that include highlighting and note-taking with the swipe of a finger. E-books also offer instant dictionary definitions of words in the text and the opportunity to ask questions of other readers.
E-books give students the freedom to read their textbooks on desktop or laptop computers, mobile devices with browsers and many different types of tablets.
Amazon.com also offers rental textbooks for their Kindle e-reader. That means the textbook disappears from the reader after a set period of time.
Keep in mind that digital textbook editions are generally not the cheapest option. A study by one online retailer reported that 81 percent of the time, renting a copy or buying a used book was less expensive than purchasing the e-book.

Free Books Online
TextbookRevolution.com is a student-run website that is dedicated to finding and sharing free textbooks. Most of the books that are available for free downloads were produced specifically for that reason.
Bookboon.com is another site that publishes proprietary textbooks and encourages professors and students to use them. It also accepts textbook submissions from authors.
Students who find themselves with an assignment to read and study a classic piece of literature may find that it is available free through Project Gutenberg. Project Gutenberg is an online digital library of 38,000 titles that are available free of charge because the copyright has expired. "Ulysses" and "Pride and Prejudice" are examples the types of free classics that are found through Project Gutenberg.

Shop And Compare Example

To illustrate the variety of prices that you can find at different vendors for the same textbook, here are some of the price comparisons of a randomly selected college textbook.
The book is, "Chemistry: The Central Science (12th edition)" by Brown, LeMay, Dursten, Murphy and Woodward.

• At Barnes & Noble, a new, hardcover copy retails for $177.13, which is discounted from the list price of $222.
• Textbooks.com found a bookseller in California with a used, hardcover copy for $90.13 with $3.99 shipping.
• Chegg.com found an electronic version for $91.60.
• Through PriorityTextbook.com, a new, softcover edition was for sale for $64.99 with shipping based on location.
• DirectTextbook.com found a rental copy at CampusBookRentals.com for $35.78 with free shipping.

Sell Them Back

The same bookstores, campus shops and online sites that sell textbooks will often buy them back at the end of the semester if the book is still in decent condition. However, students will generally only get back a portion of what was paid for the book.
Booksellers pay for books in different ways. Some will hand back cash on the spot. Online retailers will mail checks, submit a PayPal payment or issue store credit that can be used for future textbook purchases.
It may be tempting to hang onto a textbook, but the reality is that a new edition is on the way and the book will become obsolete sooner than later. Cash in while you can. No one needs outdated college textbooks on the bookshelf at the office.
For those willing to do a little comparison shopping, there are ways to save on books. Campus student stores will usually carry the books students need for classes and that is often a starting point for price comparison. However, to get the best deals, you should check out websites that search the Internet and return lists of available prices for new, used, rental and ebooks. With just a little research, you can end up saving hundreds or thousands of dollars on your college textbooks.

The Hidden Costs And Fees Of College Education

The cost of higher education is constantly on rise. In fact, some experts suggest that the cost of college increases by five percent each year. This statistic has many parents and students concerned. However, many parents and students focus too much on the cost of tuition and not enough on the hidden or lesser known expenses that come with a college education. Get educated on these hidden costs and fees and you won’t be surprised when it’s time to head to college.

Application Fees

Although you pay these before you arrive at college, application fees are required from most institutions of higher learning. The total amount you have to pay will depend on the amount of schools you apply to and the application fee charged at each institution. It is important to note that many colleges and universities offer application fee waivers for students that have trouble paying the fees. If you think you might qualify for this assistance, contact the admissions office of each school that you apply to for more information.

Travel To And From School

Many schools close down the campus during the winter holidays and require that students leave. If you live on campus that closes during this time, you might have to pay for transportation back to your family’s house. This can be costly, especially during the holiday season.
In addition, many students want to visit their families and friends during the school year. Trips to and from school can be pricy.

Entertainment

Unless you want to have no social life at college (this is not recommended), you will need money for entertainment purposes. Going out to eat, going to movies, attending concerts and going shopping are just a few of the many activities that college students enjoy. Make sure that you budget for these fun activities. Keep in mind that many colleges and universities offer free or subsidized entertainment opportunities to their students. Save yourself some money by taking advantage of these.

Tutoring

Many students take advantage of tutoring to help them excel in their academics. However, unless free tutoring is available, you will have to pay for this. First inquire about free or discounted tutoring. Then shop around to get the best deal. It’s always a good idea to ask professors and friends for recommendations.

Commuting

If you commute to and from campus, you will have to pay for the costs of transportation. If you own a car, these costs will include insurance, gas, car registration and maintenance. If you take public transportation, you will have to pay a fee each time you commute. It’s a good idea to look into student discounts and monthly passes if you are going to use public transportation. If you own a car, consider carpooling with others to save on gas.

Lab Fees

Many classes charge separate fees to students for the use of equipment. This is particularly true of science classes that have separate lab meetings. A number of performing arts classes also have lab fees. It might be wise to investigate which classes charge additional fees before registering for your classes.

Books

The costs of college textbooks can be astronomical, especially if you purchase them from your college bookstore. For example, the total cost for one year of books can reach $1,000 or more. The best way to save money on your books is to buy them online or from other students. Make sure that you thoroughly shop around for the best deal. It can end up saving you thousands of dollars over four years.

School Supplies

Computers, notebooks, writing utensils and desk lamps are just a few of the common school supplies that you will need to pay for. Additionally, living supplies such as sheets and blankets are also essential. Make a list of all the necessarily school supplies and then shop around for the best deal.

Car And Parking

Many colleges and universities charge students who bring cars onto campus. Common fees include a vehicle registration fee and a parking permit fee. If you are planning to bring your car to school, you  might want to look into free parking that is near campus.
Now that you know these hidden costs and fees associated with attending college, you can get a head start on saving for them. Kick start your college savings plan today and you won’t have to sweat when the college bills start rolling in.

The Benefits And Eligibility Of The GI Bill

For the past several years, the military has been using its GI Bill as a way to recruit qualified soldiers and officers. The popular advertisements for the Bill show a young person making the choice to sign up for military service in return for having their college education paid for. But what exactly is the GI Bill and how does it really work?

Servicemen's Readjustment Act of 1944

At the end of World War II, it became apparent that an estimated 15 million men and women serving in the armed forces would find themselves unemployed when they returned home from battle. With these staggering statistics in mind, the National Resources Planning Board began studying the need for postwar retraining and education. With the Board’s recommendations in hand, the American Legion devised a program called the Serviceman’s Readjustment Act that was designed to aid veterans readjusting to civilian life and offer assistance in the purchase of homes and businesses, medical care and education.
In 1944, just days after the D-day invasion in Normandy, President Franklin D. Roosevelt signed the bill into law to help broaden the opportunities for military personnel returning from the war. The Act, which has come to be known as the G.I. Bill, laid the ground work for the current version that is still in place today.

The Post-9/11 GI Bill

The Post-9/11 GI Bill is the most current version of the government’s readjustment program. Today, this is the largest government program providing educational assistance to military service members. To qualify for the program, an individual must meet one of the following length-of-service criteria:

• 90 days of aggregate duty on or after Sept. 11, 2001
• 30 days of consecutive service on or after Sept. 11, 2001, if discharged for disability

In addition to meeting one of the above criteria, the individual must have been honorably discharged in order to be eligible.
The original Post-9/11bill was signed into law on Aug. 1, 2009 and has undergone several amendments since its introduction. The Act now provides tuition assistance or reimbursement for those pursuing a college degree, on-the-job training and apprenticeship programs, flight training programs and correspondence courses.
Eligible service men and women are entitled to:

• A percentage (determined by the length of active duty service) of full tuition and fees for all public schools to in-state students. For private schools, the tuition reimbursement is capped at $17,500 per academic year except in nine states where a larger annual reimbursement is possible. Those attending out of state public schools or more expensive private schools may also be eligible for additional reimbursement.
• A stipend of up to $1,000 for books and supplies in each year of enrollment.
• A monthly housing allowance for those enrolled in full-time training programs. Housing stipends are prorated for students enrolled more than part-time, but less than full time.
• A one-time payment of $500 for individuals relocating from highly rural areas.
• Reimbursement for national entrance exams such as the SAT, ACT, GMAT and LSAT.
• Reimbursement for licensure or certification exams.

Amount of Benefits

The amount of benefits available through the post 9/11 GI Bill is directly proportional to the length of active duty military service. For example, active-duty veterans who have completed at least 36 months of service are eligible for 100 percent of the maximum allowed benefit, whereas someone serving between 12 and 18 months is eligible for just 60 percent. Military.com has developed a Post 9/11 GI Bill calculator to help individuals understand benefits and eligibility requirements.
In addition, the rate of benefits is also relative to the “rate of pursuit.” In other words, benefits are prorated for part-time enrollment.

The Montgomery GI Bill

Most veterans will be eligible for the Post-9/11 GI Bill. However, some veterans may also be eligible the previous version of the program, depending on when they served. The Montgomery GI Bill (MGIB) provided financial assistance for service men and women who enlisted and subsequently discharged prior to the enactment of the Post-9/11 GI Bill.
Currently enlisted active duty and reserve service members who qualify for both the MGIB and the Post-9/11 GI Bill must make an irrevocable decision to choose one program over the other.
Although the benefits of the Post-9/11 GI Bill seem to significantly outweigh those of the MGIB, there are a few instances in which the MGIB would be a better choice than the Post-9/11 GI Bill. Therefore, soldiers meeting eligibility requirements for both programs should discuss their options with a representative of the Veterans' Administration before making a final decision.

Benefit Transferability

For service members choosing not to further their own education, the VA has devised a program which allows the transfer of benefits to a spouse or children. To qualify, the service member must have served at least six years and agreed to serve an additional four years. After the tenth year of service, the individual may elect to transfer their benefits to a qualified dependent.
Service men and women put their lives on the line to serve and defend their country. The experience and education gained via the military service is invaluable. Unfortunately, the skills gained don’t always easily transfer into the non-military working world. The GI bill helps those who have served to bridge this gap through the sponsorship of additional education. If you have proudly served your country, don’t overlook this important opportunity.