Union Hill Financial Planning

With Georgia’s education budget shortfall, it’s looking likely the Board of Regents will consider a major tuition increase this year (2010) for Georgia’s public colleges.

[edit:  this post was originally written march 1, 2010.  On May 11, Georgia did raise tuition for public universities by up to 15%.   Private schools have not yet increased tuition.]

If you’re sure you’ll send your son or daughter to a Georgia school, now would be a good time to pre-pay tuition.   Unfortunately, you can’t do that for Georgia public universities.   I guess you have to hope the Hope Scholarship will remain in effect and your child will keep a 3.0 GPA in college to remain eligible.  Call me if you want to discuss tradeoffs of using a 529 savings plan versus other college savings methods, for Georgia public schools.

So what about Georgia private schools?   There is a prepaid tuition plan available for many of them.   Agnes Scott, Emory, Berry, Clark Atlanta, Mercer,  Spelman, and others.   Even though these schools aren’t under the budget pressures Georgia public colleges face, pre-paying makes sense to avoid any future increases — as long as you’re sure your child will be attending.

For out of state, you can pre-pay at schools such as Furman, Vanderbilt, Wake Forest, Notre Dame, Stanford, Johns Hopkins, Samford, Duke, Rollins,  and many others.   The university itself makes the tuition guarantee.   Call me if you want more details.

Mike Dayoub is a fee-only planner in Alpharetta/Milton and a tax preparer at H&R Block. 770 361-3139 website

Georgia’s excellent 529 plan, Path2College, offers a nifty way to use your credit card purchases to contribute to your child’s education.  It’s a FutureTrust MasterCard where a 1 percent rebate of all purchases is fed into the 529.

As long as you pay off the MasterCard each month (to avoid any interest charges) then this is a painless way to fund your child’s education.

Here’s the link to learn more.  FutureTrust

Here’s a link to learn the basics of Georgia’s 529 plan.  Path2College

Call me if you want to understand more about this or need help deciding which investment option to use in the 529.

Mike Dayoub is a fee-only financial planner in Milton, GA. Website.

College Funding Reminders

FAFSA

If you have a high school senior in the house, now’s the time to get the FAFSA filled out.

What is it? FAFSA stands for Free Application for Federal Student Aid. This form is used to determine the amount of money a family is expected to contribute to the price of attending a postsecondary institution. You fill it out online and the federal website sends it on to all the colleges you designate on the form. The results of the FAFSA are used in determining student grants, work study, and loan amounts. It’s the starting point for many private programs, not just federal grants and loans.

When? Now. High school counselors say get the FAFSA filled out by Valentine’s Day. FAFSA says you don’t need to wait for your taxes to be filed before you submit the FAFSA. It’s never too late in the year to fill it out, but the sooner the better.

Your financial planner can help you get it done.  So far I’ve helped out 12 families — at no charge — fill out the FAFSA in 2009, just to get to know them and demonstrate my value.

529 Contributions

Georgia has an excellent 529 program managed by TIAA-CREF.  Use a 529 plan to pay for college using tax-advantaged contributions and tax-free investment earnings. Even grandparents get the Georgia tax deduction for the contributions they make to a 529.

It’s not too late to use the 529 to reduce your 2008 Georgia taxable income. TIAA-CREF can accept contributions you designate for last year. Just remember, though, your contributions must remain in the account for a full year before spending them on tuition, room and board, or those contributions won’t avoid income tax.

Georgia’s 529 plan offers several investment options, with equities, fixed return, a blend, and a guaranteed return option. Consult with your financial planner to decide which investment option is right for you.

Mike Dayoub is a fee-only registered investment advisor and tax preparer in Milton, GA.  Website.