By Dan Tripp
It seems like the state colleges continue to raise tuitions. First it was Wayne State, Michigan State, and more recently, Eastern Michigan. As a parent, I am very concerned about my ability to afford to pay for college for my kids. Any suggestions?
Lots of suggestions; however, not all will work in every instance. One of the best, and most popular, plans is the 529 Plan. These are state-sponsored plans, and are similar to investment accounts, with funds accumulating on a tax-deferred basis. If these funds are used for qualified college expenses, they may be taken tax-free.
Of course, federal loans are an increasingly popular avenue for funding. However, getting a loan is not as easy as in past years, due to some lenders, such as Comerica Bank, and colleges, getting out of the student loan business, forcing students to apply directly from the federal government.
Grants and scholarships are available, if you know where to look, and if you can qualify. Many grants and scholarships are specific to location, ethnic background, and course of study; however, and often you must sell the granting organization on why you should be awarded the grant.
Parents can borrow from their retirement plans, from annuities and life insurance, or use US Savings Bonds. Check your plan documentation to determine whether this would be to your advantage.
Finally, and as a last resort, you may be able to use the equity in your home to provide funds for college. The interest is tax-deductible, but as always, you must qualify.
Dan H. Tripp CLU
Dan H. Tripp CLU is a Financial Representative with Michigan Financial Companies, a member of the John Hancock Financial Network and Grosse Pointe City resident. He may be reached by calling (586)939-6926, ext. 227.
Registered Representative/Securities and Investment Advisory Services offered through Signator Investors, Inc., Member FINRA, SIPC, a Registered Investment Advisor, 28411 Northwestern Highway, Suite 1300, Southfield, MI 48034.