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Discover High-Tech Tools That Help With College Savings

By U.S. News & World Report

Saving for college is no longer as simple as stashing money in a savings account, says Marcos Cordero, CEO of Saving for College LLC, which publishes the website Savingforcollege.com.

With dozens of state-sponsored 529 plans, which are tax-advantaged college savings accounts, as well as other investment vehicles to choose from, families may find it helpful to turn to innovative tools to guide them through the college savings process.

“Families planning to save for college would be wise to take advantage of the high-tech tools available to them, especially when it comes to 529 plans,” Cordero says. “These accounts are complex and can be overwhelming for those just starting to invest.”

[Search for plans with the U.S. News 529 Finder.]

Mobile apps, “robo-advisors” and website tools can help parents and students make decisions about how much money to save and where they should put it. Here are several options for getting techy with college savings.

1. “Robo” investing: San Francisco-based FutureAdvisor unveiled its “Diplomas Without Debt” platform, a robo-advisor that aims to help investors with college savings, in May.

The free, online service takes into consideration a person’s state of residence, income, savings goals and other factors to make recommendations about which vehicles make sense for the investor. It will recommend not only 529 plans, but other education savings vehicles, too, such as Coverdell Education Savings Accounts or Uniform Transfers to Minors Act accounts, and then helps the client open the account and manage the investment.

[Take a quiz to determine if you’re a college savings plan expert.]

“As a parent trying to understand what accounts are available to you and what their purposes are and what are the contribution limits, all those things stack together, and for each individual person, the combination of tools available could be different,” says Megan Graf, client service and operations specialist at FutureAdvisor.

Caveat emptor: The company works specifically with Fidelity and TD Ameritrade and can only manage 529 accounts with those plan managers. Joe Fahr, FutureAdvisor’s vice president of marketing, says the software will let users know there may be potential tax advantages for choosing a plan in their home state, even if it’s not managed by Fidelity or TD Ameritrade, though it will also recommend a FutureAdvisor-managed plan.

2. Mobile apps: College savings apps vary from those that help students and parents predict college costs to those that teach children about spending and developing college goals.

In addition to the convenience factor, “apps can be helpful in the sense that they provide parents with budgets and goals, along with tools to help manage investments and add to college savings,” says Suzanne Shaffer, a Texas-based college coach for parents. “The best apps offer projected college costs and help parents plan accordingly.”

[Discover 10 tools that offer a tailored estimate of college costs.]

The College Ahead app by Sallie Mae is one example of the free college savings apps available. It estimates costs based on what type of college the student plans to attend, whether he or she plans to live on or off campus and what type of degree he or she is planning to earn. It also includes a college scorecard to keep track of potential schools and a FAFSA roadmap. The apps 4College!, by asset manager Legg Mason, and College Saving Wiz both estimate college costs to help develop a monthly savings plan.

There are others aimed at children. Big Start by Ascensus, which manages Indiana’s CollegeChoice 529 plan, is designed for children up to age 6. It allows the child to choose an avatar as part of an ebook and also includes activities about money and future career goals. Big Dreamers, for ages 7 to 12, and Max U, for children ages 13 to 18, also help with college planning.

3. College savings gift registries: Several sites allow college savers to set up Web pages so that friends, family — and even strangers — can help contribute to their college funds.

FutureAdvisor’s newest product, called FutureGift, allows college savers to set up free pages centered around events such as a baptism or a first birthday so that family and friends can donate to a college savings account rather than give a material gift.

“You can think of it as an enabling tool for friends and family to be involved in the savings process for college,” Graf says.

Givecollege.com offers a college savings gifting platform for a service fee. Prospective college students have been known to use general crowd-funding applications such as GoFundMe.

4. Online calculators and comparison tools: Savingforcollege.com showcases a college savings planner that can help determine how much a family should be saving each month to reach their college savings goal and lets them sort through the bevy of 529 plans using factors such as performance and fees.

In addition, Morningstar, the financial research firm, offers members a detailed plan analysis by state on its website, and College Savings Plans Network, a coalition of state plans, offers a calculator and a comparison tool on its website.

Trying to save for college? Get tips and more in the U.S. News College Savings 101 center.

More from U.S. News

3 Reasons to Open Multiple 529 College Savings Accounts

4 Common Questions About Spending 529 College Savings Funds

3 Ways to Talk About College Savings With a High School Graduate

Discover High-Tech Tools That Help With College Savings originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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