How to fund a college education

[bluemarlin08]

Place the UL on the child, not the adult. You can then overfund it to build value.


Why do you think that is a better funding strategy than investing in equities?
What is the projected return at the time the kid starts to withdraw to go to school?

 

[Crabcake Johnny]

There are also colleges that will allow you to lock in at today's tuition rates.

 

[djs]

Place the UL on the child, not the adult. You can then overfund it to build value.


Why do you think that is a better funding strategy than investing in equities?
What is the projected return at the time the kid starts to withdraw to go to school?

Again, I highly recommend the 529 over any form of life insurance or pure equity play for college funding.

The answer to your question though is taxes. You don't need a lot of life insurance on a child, but as long as you stay within TAMRA guidelines, you can overfund a policy to get the cash value to build faster. This is not the best way to work solely towards a college education, but it is one way.

Taxes is the same answer as to why the 529 is is the better vehicle for college funding than pure equities.

Dan

 

[Crabcake Johnny]

I recommend Military Insurance. Devote 2-4 years of your life to a trade you are interested in and get enough money via a GI Bill to get a few degrees. Use financial aid for the rest and take your time paying it off at the 2-3% current interest rate.........

I'm sure there are a lot of troops in Iraq who just joined for the college benefits. I think some may be re-thinking that decision.

It worked out for me. I did 4 years and got the GI bill which paid for all 4 years at Towson State. I was 12 credit shy of graduating with a degree in sociology and got a summer sales job. 2 weeks before going back for my last semester they offered me a management position in LA for $60,000. I never looked back. Still 12 credits shy.

 

[J.R.]

Selling what in LA?

 

[Crabcake Johnny]

I worked for a company called "wholesale warehousing" (now called DX Max) and we went B to B selling toys. I "owned" one of the offices. Very lucrative if you don't mind 14 hour days 6 days a week.

 

[LGilmore]

If there's alot of time, the best is still permanent life..... I know I know... However, when I filled out the FAFSA for my kids college, they don't ask for cash values. 529's, coverdales are fine but don't work in every situation and you have to declare them.

If you're talking to someone whose kids are a couple years away from school a cookie jar is about as good as any. I guess the key to the situation is time before needed (growth), tax status and reporting status.
Lead Time creates more choices.

Oh, the days of 2-3% interest are long gone. Thanks Gw. Son just sign medschool loans at 8%. Undergrad is around 7% now. Four years ago 2.9% then.... Thank god for scholarships.

 

[Alsky]

"Im thinking that a 529 is the best way for her to go even though I will give up a commision for an insurance sale by advising her to do the 529."

That's a strange statement.

Whats so strange about not considering commission over my clients best interests? Perhaps you read something in my statement that was not intended.

Al

 

[Mr. Bill]

I have yet to meet parents who independently (meaning, outside of their employer's group life insurance plan) had enough life insurance on themselves. You want an education on the financial aid process, read How to Pay for College Without Going Broke by Kal Chaney (chany?). Don't come back to this board until you do.

Then you can make the right recommendations, which will likely NOT result in a 529.

 

[djs]

I've read a lot of things that say 529's are bad plan, I've read as many that say they are wonderful. Basically, if you don't qualify for financial aid anyway, then they can be a great tool.

There is no 'single' solution. The tax advantages of the 529's may offset some of the financial aid losses caused by the 529's. Most people don't fund life insurance well enough for it to be a viable way to pay for college, but it's possible to do. You can put money straight into stocks / mutual funds / bonds, etc, but then you have both the tax issues, as well as the asset issue.

At issue is the governments schizophrenia. Financial aid basically is for those who didn't save, and 529's are for those who do save. Student loans are for those of us who saved, but not near enough. (and yes, I know this isn't a perfect statement, but it does illustrate the problem).

Dan