By Victor Ochieng
There are many people who have extra money that could be saved for their children’s education. Some people feel that if they save money for college, the school will just take the money and run. Well, they’ll definitely take it, but don’t you think it makes more sense that you actually save for your children’s college studies?
The consequences of not saving for children’s education has been widely displayed as the presidential campaigns are underway. Two of the candidates, Marco Rubio and Martin O’Malley, each had some college debt. Martin O’Malley, for example, owes $340,000 for the tuition of his two children. Marco Rubio recently parted with thousands of dollars to clear his own student loan debt. When he was elected to senate in 2010, it’s said that he still owed between $100,001 and $250,000. He revealed that he was able to clear his debt from the sale of his autobiography, An American Son. Although Martin O’Malley’s case has been viewed as a way to boost his presidential campaign, as he seeks to implement debt-free college, experts view his accumulated debt as poor financial planning.From such cases, it should be clear that it’s wise to save for college, even with the prospect of receiving grants or loans.
For middle- to upper-middle class families, it’s a challenge getting need-based grants. Once the applicant submits the Free Application for Federal Student Aid (FAFSA), the federal government digs into the family’s income and determines whether they qualify for need-based aid. For a family that earns a reasonable amount of money, it’s almost impossible to qualify for such grants unless a family has more than one child studying in college at the same time. There is also the option of applying for grants from the college itself, which will likely involve another application process.
Although the focus is mainly on one’s income, it also looks into savings and assets. Ann Garcia, a financial planner at Beacon Rock Partners in Portland, took to her blog to explain how grants are calculated so that people are encouraged to save for college, retirement, as the government wouldn’t penalize them for doing so.
Pamela W. Fowler, executive director of the office of financial aid at the University of Michigan, said of individuals’ who don’t save for college because their income thinking their income will qualify for grants, “We have no idea what the income thresholds will be five to ten years from now when your son or daughter is ready to go to school. So you want to take a chance on that? I just don’t understand people’s thinking.”
The best thing to do, therefore, is to begin saving now.
Secure the future of your children!
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