Tag Archives: financial aid

Saving For College

October 1, 2017 by
Photography by Sarah Lemke

Breathe. College can be paid for, and help is available.

When it comes to planning for college, “It’s definitely never too early,” says Joan Jurek, director of college planning for the Omaha office of EducationQuest, a private, nonprofit organization with a mission to improve access to higher education in Nebraska. “Families should start saving as much as they can for college when their child is young.”

For some families, planning for future college expenses may begin as soon as a child is born. This is the optimum time, as putting away $100 per month when a child is less than 1 year old could result in $20,000-$30,000, average, by age 18, depending on the plan.

The myriad possibilities include Coverdell education savings accounts (CESAs), IRAs, custodial accounts, and various investments like savings bonds, mutual funds, money market accounts, and CDs. Professional financial planners and advisers can present the pros and cons for each option. Ample information is also available online.

A 529 Plan is a simple option designed to help families set aside funds for future college costs, says Deborah Goodkin, managing director of savings plans with First National Bank of Omaha. First National Bank is Nebraska’s Educational Savings Trust (NEST) 529 program manager.

On the other hand, not every family can afford to start a college savings plan when their child is born. “It’s also never too late,” Jurek says.

“There’s no wrong time to start; just start when you can,” Goodkin says, adding that not only can any family member start a plan for a child, the NEST system also makes it possible to invite other family members to contribute.

“Whoever opens up the plan is saving for a child’s dream,” she says. “Statistics have shown that kids who know that there is a college account set up in their name are more likely to do well in school and do well in college. You’re setting the expectation for your family member to go to college and do well and think about their career.”

Parents can start saving for college, but at some point, the student will need to become involved in the planning process. This ideally starts in eighth grade, Jurek says.

“This will give them time to make sure the student takes coursework throughout high school to ensure college admission, explore career interests, and research colleges that fit those interests,” she explains. Families can then begin to more specifically assess costs associated with their student’s institutions of interest against available funds.

“The junior year is especially important, as that is when students should narrow their college choices and understand financial aid options. They can do this by attending a financial aid program, going on campus visits, and attending college fairs,” Jurek says. “This will prepare them to apply for college and federal financial aid early in the fall of their senior year.”

One thing parents should not bank on—college scholarships, especially sports scholarships. Only about 2 percent of students receive a full-ride Division I sports scholarship. Further, those full-ride scholarships are only available to boys in men’s football and basketball, and to girls in women’s basketball, gymnastics, volleyball, and tennis. Got a young Alex Gordon? Don’t expect a scholarship to cover the costs of college. That’s because in baseball, like many sports, the team’s available scholarships can be broken into smaller portions, so the “15 available scholarships” may become 20, or even 30, smaller scholarships.

Likewise, be cautious of expecting renewable merit scholarships to finance a student’s entire college career. In some states, as many as half of the B-average students who receive merit scholarships as freshman drop below the acceptable GPA for a merit scholarship by the renewal period for their sophomore year.

Which brings up finanicial aid. Jurek explains that some forms of federal financial aid are need-based, including grants, work-study programs, certain scholarships, and subsidized student loans. Online tools to estimate financial need are available to anyone on EducationQuest.org, but for students to be considered for federal financial aid, they must complete the Free Application for Federal Student Aid (FAFSA) at fafsa.gov.

“‘I can’t afford it’ is a common misconception,” Jurek says. “There are ways to make college affordable including applying for financial aid and scholarships, starting at a less expensive community college, or living at home while going to college.”

Post-secondary education also doesn’t have to begin right out of high school. Adults can start their own 529 Plan, Goodkin says. There is no maximum starting age for college if life circumstances force delays, or if a young person wants to work for a year or two and put away money.

Whether or not a college savings plan is in place early on, the later process of researching college options, finding scholarship resources, learning about financial aid, and completing college applications and the FAFSA can still be daunting.

“Families who are worried about the college planning process—or don’t think college is possible—should be aware that free help is available,” Jurek says.


Alternatives to four-year degree programs

A common theory at this time is “I need a four-year degree!” Do you? Maybe not. In some fields, work experience counts more than a piece of sheepskin. Enjoy working in restaurants? A person could start working right away and work their way up. Many chefs do this, taking jobs as dishwashers or servers and moving through the ranks as they prove themselves.

“In certain areas you can actually earn more than a person who completes a four-year degree, and come out (of college) with no debt or less debt,” says Metropolitan Community College (MCC) Career Services Manager Monique Cribbs.

Others choose career paths that may or may not include some education from a community college:

  • Earning an associate’s degree
  • Earning a certificate of achievement for expanded coursework in a specific area
  • Taking noncredit courses, which can expand a person’s knowledge of one subject
  • Enlisting in military service, which provides career education and paid experience
  • Joining a trade, such as International Brotherhood of Electrical Workers, which allows men and women to “earn as you learn”

A community college also offers core classes at a lower tuition rate.

“Community college is not a second choice or a consolation prize. It’s a valuable option for any person going back and increasing their knowledge or continuing their education,” says Cribbs.

This article was printed in the Fall 2017 edition of Family Guide.

Deborah Goodkin

Prep for College Now

October 28, 2013 by

With college tuition seeing double-digit hikes and student loan debt at an all-time high, affording college is a big concern for many parents and students. But there are plenty of options that can make higher education reasonable for people at all income levels—grants, scholarships, financial aid, or just a good savings account. It’s all in the planning. Here are a few tips from four local financial pros.

“Certainly, the amount they should save depends on each [person’s] financial situation, but I tell them to put aside something. Start out with a regular savings account and build from there.” —Beverly Hobbs

Start Saving ASAP

Beverly Hobbs, LPL Financial Advisor with SAC FCU Wealth Management located at SAC Federal Credit Union, says parents should ideally begin saving for their child’s college education when they’re born. “With college as expensive as it is and costs rising…the earlier, the better,” Hobbs says. “Certainly, the amount they should save depends on each [person’s] financial situation, but I tell them to put aside something. Start out with a regular savings account and build from there.”

“The key here is consistency,” adds Crissy Hayes, vice president of operations at SAC FCU. “Take what discretionary income you have and budget to pay yourself first, then pay your kids second.” Scheduling automatic checking account withdrawals or payroll deductions to make regular deposits to a college fund—a “set it and forget it” system—is highly recommended.

“…all earnings in the investment are tax-deffered and remain tax-free when funds are withdrawn for higher-education expenses.” —Deborah Goodkin

Consider Investing in a 529 College Savings Plan

Deborah Goodkin, managing director of college savings plans for First National Bank of Omaha, says 529 College Savings Plans are among the best tools for parents to save for their children’s education. Plans, of which there are more than 90 available nationally, are issued by individual states. Nebraska offers four 529 plans, commonly referred to as NEST (Nebraska Education Savings Trust) plans.

NEST plans offer three big advantages, Goodkin says. “First, all earnings in the investment are tax-deferred and remain tax-free when funds are withdrawn for higher-education expenses. Second, for those who pay Nebraska state income tax, up to $5,000 of NEST contributions are deductible in computing one’s state income tax, and that amount will rise to $10,000 as of Jan. 1, 2014. Third, for those who are not savvy investors, 529 plans offer an easy way to invest and offer flexibility to move funds from more aggressive to less aggressive investments as the child ages, much like an IRA with a target retirement date does. Most plans have no minimum monthly investment, and as much as $360,000 total can be saved in any single NEST plan.”

Community colleges, technical and culinary schools, four-year colleges, and even universities abroad all qualify under 529 plan guidelines. Covered college expenses include tuition, books, fees, computers (when required for coursework), and room and board. “Virtually everything except transportation to and from school is included,” Goodkin adds.

In addition, 529 plans allow grandparents and others to make deposits as well, and the funds are transferable to other family members seeking higher education if the plan beneficiary does not use them.

Goodkin warns there are penalties on earnings when funds are withdrawn for unqualified expenses. And like any investment, there are always financial risks to consider. “But NEST plans have some of the highest plan ratings in the country, based on their earnings performance, their ease of use with online management tools and customer service, and the plans’ history of giving back to the community.”

Nonetheless, Hobbs advises parents to sit down with an expert before making any investment decisions. “Prior to investing in a 529 plan or making any investment, you want to talk with a financial advisor and tax advisor to assess your individual needs, your goals, and your risk tolerance. There are so many options, restrictions, and regulations, you want to make sure you get all your bases covered.”

“Too many parents make the mistake of thinking their kids will get full college scholarships—either academic or athletic—and they’re ill-prepared when they don’t.” —Goodkin

Look to Scholarships for Help (But Don’t Depend on Them Entirely)

“Too many parents make the mistake of thinking their kids will get full college scholarships—either academic or athletic—and they’re ill-prepared when they don’t,” Goodkin says. “What they don’t realize is that federal scholarship income guidelines are too low for many to quality. In addition, more people today are in need of financial assistance, so more are applying for scholarships. There’s just less out there.”

That’s not to say there aren’t scholarships to be found, many of which can be researched and applied for online. A comprehensive list of college scholarships, application tips and more can be found at www.scholarships.com. Students don’t need to wait until their junior or senior high school years to begin the scholarship hunt, Goodkin adds. Hundreds of smaller scholarships are awarded each year to elementary and high school students who enter essay contests, music competitions, and so on.

A high school guidance counselor can also be a great resource for learning about small scholarships offered in one’s community (think VFW, local charities, the Chamber of Commerce, etc.) or school system.

“Make sure to find out from the school what their priority deadline for FAFSA forms is [for financial aid for the following fall], as they vary.” —Paula Kohles

Seek Financial Aid

If scholarships and college savings just aren’t enough to cover your expenses, then seeking student financial aid is your next step. “Begin by completing your FAFSA [Free Application for Federal Student Aid] form well in advance and submitting to your college’s financial aid department to see if you qualify for federal grants or other aid,” suggests Hobbs.

Paula Kohles, associate director of financial aid at Creighton University, says FAFSA forms are typically filled out online these days and sent electronically to a school’s financial aid department. The beginning of a student’s second semester of their senior high school year is suggested as a good time to apply. “Make sure to find out from the school what their priority deadline for FAFSA forms is [for financial aid for the following fall], as they vary. Creighton’s is April 1st, but other schools’ deadlines are even earlier.”

Once received, the school will evaluate a student’s financial situation and send them an award notification letter spelling out their aid eligibility, Kohles says. Federally subsidized Stafford Loans and Perkins Loans, which offer college students reduced interest rate loans and special repayment options, as well as Pell Grants (which don’t need to be repaid), are some of the options students may qualify for.

“We also look at their eligibility for campus-based SEOGs (Supplemental Education Opportunity Grants) and work-study programs, as well as unsubsidized loan programs,” Hobbs adds. “There are a lot of aid options out there.”

The final takeaway? College preparation requires sound financial planning and good ol’ resourcefulness. But if you fall short, there is help available. Now get to it!

Beverly Hobbs is a registered representative with and securities offered through LPL Financial, Member FINRA/SIPC.