Sunday, March 28, 2010
Editorial: An affordable option for tomorrow's tuition
The Virginia College Savings Plan can help parents prepare for the financial burden of college.
From the RoundTable blog
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College students and their parents are keeping a nervous watch as Virginia's colleges figure out how much to raise tuition to offset state budget cuts.
Tuition and fees have risen 11.2 percent in five years at the state's public colleges, and there is little doubt the price will continue to go up.
Today's students whose families had the foresight to lock in tuition costs years ago are reaping the benefit now. It's something for the parents of tomorrow's students to consider.
The Virginia College Savings Plan has four options for families of varying means to consider, one of which locks in tuition prices.
Each year, that program has a short enrollment window of opportunity -- a window that is about to slam shut.
Parents have only until midnight Wednesday to purchase a contract through the Virginia Prepaid Education Program. The prepaid program is a great way to pay for a child's future college education with today's dollars, but the large up-front cost could be difficult for struggling families.
The amount varies, depending mostly on the child's age, making it much cheaper to buy a year's tuition for a newborn than for a ninth-grader.
Not all families, especially those with parents still paying off their own student loans, can afford even the monthly payment option required for prepaid accounts ($103 per month for a one-year university contract for a newborn on an extended installment plan).
That's why the state offers three other programs, one of which will surely fit just about anyone's budget and tolerance for financial risk taking.
Each comes with the same tax advantages of the prepaid program, but lets parents and grandparents direct contributions in funds either administered by the state or by their own financial adviser.
The newest program allows families to save in Federal Deposit Insurance Corp.-insured accounts through traditional banks, but the return is not as great.
Still, any funds tucked away now for future college expenses will help to ease the sting of paying rapidly rising tuition.
