Tuesday, August 16, 2011

529 Drops, Tuition Pops

529 Drops, Tuition Pops

SmartMoney has a pair of articles about the market impact to College Savings Plans: New Losses for College Savers

As colleges are about to send tuition bills, the markets have taken yet another toll on the most popular college-savings accounts in the country: 529 plans.

For the second time in three years, the popular state plans are taking losses that, while less than the broad market, are hitting teenagers starting college this year or next. In at least 14 state plans, at least some investment portfolios intended for students 17 and older are now in the red, wiping out a chunk of money that parents may have earmarked for this year's tuition. In some states, those accounts are down as much as 5% since the beginning of July, better than the 12% loss of the Standard and Poor's 500-stock index but still unpleasant for parents with tuition bills due this fall. 

Last-Minute Tuition Hikes Hit College Students: "Last month, Texas and New Hampshire announced 6% to 10% tuition hikes at some public universities. A spokesman for the Texas Higher Education Coordinating Board says as of now, the hikes impact two out of 35 colleges, with the potential for more to come."

Annamaria Andrioti wrote both articles and can be followed on Twitter @AAndriotis

The Business Insider poses the question: Guess The One Industry That Has Made Healthcare Inflation Look Tame? Even the best laid plans (529 or otherwise) can be undermined by poor market performance or by underestimating the inflation rate in tuition. Some funding is better than none, and it's critical to understand the recent changes to Student Loans. 

Make sure to check out the College Scholarships.org Infographic: The Student Loan Scheme which outlines the inescapable problem of borrowing from the Government. 

Bottom Line

Check your budget, adjust your college expectations -- not your life goals. 


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