Paying for College
Smart Student Guide to Financial Aid
www.finaid.org
You will find everything you need, including calculators to help you with the math on loan payments, college cost projections, financial aid estimation forms, reference book resources, videotape resources, information on free booklets by mail, periodicals, lobbying and advocacy groups, and discussion groups.
A great website for information about financial aid with all the latest information about state and federal plans is run by Joseph Hurley at. Hurley has also written a terrific book on the subject, The Best Way to Save for College.
Fast Web
www.fastweb.com
College Board
www.collegeboard.com
FAFSA
(800) 4-FED-AID
www.fafsa.ed.gov
The Free Application for Federal Student Aid (FAFSA) is used to apply for most state loan, grant, and scholarship programs, in addition to the federal loans and grants. When you submit the FAFSA to the U.S. Department of Education, they for ward the information on the form to the state student assistance agency. You must submit the FAFSA every year that you want to receive aid. The FAFSA is available in paper and electronic formats. You can get the paper version from your high school, the financial aid office at any college or university, the public library, or by contacting FAFSA.
If you prefer, you can fill out a web-based version of the FAFSA at wwwfafia.ed.gov (step-by-step instructions are provided on this site). Each state has a different FAFSA submission deadline. If you submit your FAFSA by March 1, you will be in time for all state deadlines, other than Michigan's. If you miss the dead- line, you will be ineligible to receive state aid for the entire academic year. Procedures for applying for state prepaid tuition programs and the National Guard differ from state to state. The amount of information provided on the states' websites varies. Some states provide comprehensive information about residency requirements, loan, grant, scholarship and prepaid tuition programs, and other state aid programs. Others provide minimal information. It's a good idea to visit the sites for your state of residence and also for the states of the colleges to which you are applying.
Alabama
Alabama Commission on Higher Education
Suite 205
3465 Norman Bridge Road
Montgomery, AL 36105-2310
(334) 281-1998
or
State Department of Education
Gordon Persons Office Building
50 North Ripley Street
Montgomery, AL 36130-3901
(205) 242-8082
Alaska
Alaska Commission on Postsecondary Education
3030 Vintage Boulevard
Juneau, AK 99801-7109
(907) 465-2967
or
State Department of Education
Goldbelt Place
801 West 10th Street, Suite 200
Juneau, AK 99801-1894
(907) 465-8715
Arizona
Arizona Commission for Postsecondary Education
2020 North Central Avenue, Suite 275
Phoenix, AZ 85004-4503
(602) 229-2531
or
State Department of Education
1535 West Jefferson
Phoenix, AZ 85007
(602) 542-2147
Arkansas
Arkansas Department of Higher Education
114 East Capitol
Little Rock, AR 72201-3818
(501) 324-9300
or
Arkansas Department of Education
4 State Capitol Mall, Room 304A
Little Rock, AR 72201-1071
(501) 682-4474
California
California Student Aid Commission
Mailing address:
P.O. Box 419026
Rancho Cordova, CA 95741-9026
Street address:
3300 Zinfandel Drive
Rancho Cordova, CA 95670
Customer Service Department: (916) 526-7590
or
California Department of Education
721 Capitol Mall
Sacramento, CA 95814
(916) 657-2451
Colorado
Colorado Commission on Higher Education
Colorado Heritage Center
1300 Broadway, 2nd Floor
Denver, CO 80203
(303) 866-2723
or
State Department of Education
201 East Colfax Avenue
Denver, CO 80203-1705
(303) 866-6779
Connecticut
Connecticut Department of Higher Education
61 Woodland Street
Hartford, CT 06105-2326
(860) 947-1855
or
Connecticut Department of Education
165 Capitol Avenue
P.O. Box 2219
Hartford, CT 06106-1630
Delaware
Delaware Higher Education Commission
Carvel State Office Building, Fourth Floor
820 North French Street Wilmington, DE 19801
(302) 577-3240
or
State Department of Public Instruction
Townsend Building #279
Federal and Lockerman streets
P.O. Box 1402
Dover, DE 19903-1402
(302) 739-4583
District of Columbia
Department of Human Services
Office of Postsecondary Education
Research and Assistance
2100 Martin Luther King, Jr., Avenue, SE
Suite 401
Washington, DC 20020
(202) 727-3685
or
District of Columbia Public Schools
Division of Student Services
4501 Lee Street, NE
Washington, DC 20019
(202) 724-4934
Florida
Florida Department of Education
Office of Student Financial Assistance
1344 Florida Education Center
325 West Gaines Street
Tallahassee, FL 32399-0400
(904) 487-0649
Georgia
Georgia Student Finance Commission
State Loans and Grants Division
Suite 245
2082 East Exchange Place
Tucker, GA 30084 (404) 414-3000
or
State Department of Education
2054 Twin Towers East, 205 Butler Street
Atlanta, GA 30334-5040
(404) 656-5812
Hawaii
Hawaii State Postsecondary Education Commission
2444 Dole Street, Room 202
Honolulu, HI 96822-2394
(808) 956-8213
or
Hawaii Department of Education
2530 10th Avenue, Room A12
Honolulu, HI 96816
(808) 733-9103
Idaho
Idaho Board of Education
P.O. Box 83720
Boise, ID 83720-0037
(208) 334-2270
or
State Department of Education
650 West State Street
Boise, ID 83720
(208) 334-2113
Illinois
Illinois Student Assistance Commission
1755 Lake Cook Road
Deerfield, IL 60015-5209
(708) 948-8500
Indiana
State Student Assistance Commission of Indiana
Suite 500, 150 West Market Street
Indianapolis, IN 46204-2811
(317) 232-2350
or
Indiana Department of Education
Room 229, State House
Center for Schools Improvement and Performance
Indianapolis, IN 46204-2798
(317) 232-2305
Iowa
Iowa College Student Aid Commission
914 Grand Avenue, Suite 201
Des Moines, Iowa 50309-2824
(800) 383-4222
Kansas
Kansas Board of Regents
700 S.W Harrison, Suite 1410
Topeka, KS 66603-3760
(913) 296-3517
or
State Department of Education
Kansas State Education Building
120 East Tenth Street
Topeka, KS 66612-1103
(913) 296-4876
Kentucky
Kentucky Higher Education Assistance Authority
Suite 102, 1050 U.S. 127 South
Frankfort, KY 40601-4323
(800) 928-8926
or
State Department of Education 500 Mero Street
1919 Capital Plaza Tower
Frankfort, KY 40601 (502) 564-3421
Lousiana
Louisiana Student Financial Assistance Commission
Office of Student Financial Assistance
P.O. Box 91202
Baton Rouge, LA 70821-9202
(800) 259-5626
or
State Department of Education
P.O. Box 94064
626 North 4th Street, 12th Floor
Baton Rouge, LA 70804-9064
(504) 342-2098
Maine
Finance Authority of Maine
P.O. Box 949
Augusta, ME 04333-0949
(207) 287-3263
or
Maine Department of Education
23 State House Station
Augusta, ME 04333-0023
Voice: (207) 287-5800
TDD/TYY for Hearing-Impaired: (207) 287-2550
Fax: (207) 287-5900
Maryland
Maryland Higher Education Commission
Jeffrey Building, 16 Francis Street
Annapolis, Maryland 21401-1781
(410) 974-2971
or
Maryland State Department of Education
200 West Baltimore Street
Baltimore, Maryland 21201-2595
(410) 767-0480 132
Massachusetts
Massachusetts Board of Higher Education
330 Stuart Street
Boston, MA 02116
(617) 727-9420
or
State Department of Education
350 Main Street
MaIden, MA 02148-5023
(617) 388-3300
or
Massachusetts Higher Education Information Center
666 Boylston Street
Boston, MA02116
(617) 536-0200 x4719
Michigan
Michigan Higher Education Assistance Authority
Office of Scholarships and Grants
P.O. Box 30462
Lansing, MI 48909-7962
(517) 373-3394
or
Michigan Department of Education
608 West Allegan Street
Hannah Building
Lansing, MI 48909
(517) 373-2234
Minnesota
Minnesota Higher Education Services
Office Suite 400, Capitol Square Building
550 Cedar Street
St. Paul, MN 55101-2292
(800) 657-3866
or
Department of Children, Families, and Learning
Suite 712, Capitol Square Building
550 Cedar Street
St. Paul, MN 55101
(612) 296-6104
Mississippi
Mississippi Postsecondary Education
Financial Assistance Board
3825 Ridgewood Road
Jackson, MS 39211-6453
(601) 982-6663
or
State Department of Education
P.O. Box 771
Jackson, MS 39205-0771
(601) 359-3768
Missouri
Missouri Coordinating Board for Higher Education
3515 Amazonas Drive
Jefferson City, MO 65109-5717
(314) 751-2361
or
Missouri State Department of Elementary and Secondary Education
P.O. Box 480
205 Jefferson Street, Sixth Floor
Jefferson City, MO 65102-0480
(314) 751-2931
Montana
Montana University System
2500 Broadway
Helena, MT 59620-3103
(406) 444-6570
or
State Office of Public Instruction
State Capitol, Room 106
Helena, MT 59620
(406) 444-4422
Nebraska
Coordinating Commission for Postsecondary Education
P.O. Box 95005
Lincoln, NE 68509-5005
(402) 471-2847
or
Nebraska Department of Education
P.O. Box 94987
301 Centennial Mall South
Lincoln, NE 68509-4987
(402) 471-2784
Nevada
Nevada Department of Education
400 West King Street
Capitol Complex
Carson City, NV 89710
(702) 687-5915
New Hampshire
New Hampshire Postsecondary Education Commission
2 Industrial Park Drive
Concord, NH 03301-8512
(603) 271-2555
or
State Department of Education
State Office Park South
101 Pleasant Street
Concord, NH 03301
(603) 271-2632
New Jersey
State of New Jersey
Office of Student Financial Assistance
4 Quakerbridge Plaza, CN 540
Trenton, NJ 08625
(800) 792-8670
or
State Department of Education
225 West State Street
Trenton, NJ 08625-0500
(609) 984-6409
New Mexico
New Mexico Commission on Higher Education
1068 Cerrillos Road
Santa Fe, NM 87501-4925
(505) 827-7383
or
State Department of Education
Education Building 300 Don Gaspar
Santa Fe, NM 87501-2786
(505) 827 -6648
New York
New York State Higher Education Services Corporation
One Commerce Plaza
Albany, NY 12255
(518) 474-5642
or
State Education Department
111 Education Building Washington Avenue
Albany, NY 12234
(518) 474-5705
North Carolina
North Carolina State Education Assistance Authority
P.O. Box 2688
Chapel Hill, NC 27515-2688
(919) 821-4771
or
State Department of Public Instruction
Education Building
Division of Teacher Education
116 West Edenton Street
Raleigh, NC 27603-1712
(919) 733-0701
North Dakota
North Dakota University System
North Dakota Student Financial Assistance Program
600 East Boulevard Avenue
Bismarck, ND 58505-0230
(701) 224-4114
or
State Department of Public Instruction
State Capitol Building, 11th Floor
600 East Boulevard Avenue
Bismarck, ND 58505-0164
(701) 224-2271
Ohio
Ohio Board of Regents
P.O. Box 182452
309 South Fourth Street
Columbus, OH 43218-2452
(888) 833-1133
or
State Department of Education
65 South Front Street, Room 1005
Columbus, OH 43266-0308
(614) 466-2761
Oklahoma
Oklahoma State Regents for Higher Education
Oklahoma Guaranteed Student Loan Program
P.O. Box 3000
Oklahoma City, OK 73101-3000
(405) 858-4300
1-800-247-0420
or
State Department of Education
Oliver Hodge Memorial Education Building
2500 North Lincoln Boulevard
Oklahoma City, OK 73105-4599
(405) 521-4122
Oregon
Oregon State Scholarship Commission
Suite l00, 1500 Valley River Drive
Eugene, OR 97401-2130
(503) 687-7400
or
Oregon State System of Higher Education
700 Pringle Parkway, SE
Salem, OR 97310-0290
(503) 378-5585
or
Oregon Department of Education
255 Capitol Street, NE
Salem, OR 97310-0203
Pennsylvania
Pennsylvania Higher Education Assistance Agency
1200 North Seventh Street
Harrisburg, PA 17102-1444
(800) 692-7435
or P.O.Box8114
Harrisburg, PA 17105-8114
(717) 720-2075
Rhode Island
Rhode Island Board of Governors for Higher Education and Rhode Island Office of Higher Education
301 Promenade Street
Providence, RI 02908-5720
Voice: (401) 277-6560
Fax: (401) 277-6111
E-mail: RIBOG@uriacc. uri.edu
or
Rhode Island Higher Education Assistance Authority
560 Jefferson Boulevard
Warwick, RI 02886
(800) 922-9855
or
State Department of Education
22 Hayes Street
Providence, RI 02908
(401) 277-3126
South Carolina
South Carolina Higher Education Tuition Grants Commission
1310 Lady Street, Suite 811
P.O. Box 12159
Columbia, SC 29201
(803)734-1200
or
State Department of Education
803A Rutledge Building
1429 Senate Street
Columbia, SC 29201
(803) 734-8364
South Dakota
Department of Education and Cultural Affairs
Office of the Secretary
700 Governors Drive
Pierre, SD 57501-2291
(605) 773-3134
Tennessee
Tennessee Higher Education Commission
404 James Robertson Parkway
Suite 1900
Nashville, TN 37243-0820
(615) 741-3605
or
State Department of Education
100 Cordell Hull Building
Nashville, TN 37219-5335
(615) 741-1346 or (800) 342-1663 (TN residents only)
Texas
Texas Higher Education Coordinating Board
P.O. Box 12788, Capitol Station
Austin, TX 78711
(800) 242-3062
Utah
Utah State Board of Regents
Utah System of Higher Education
355 West North Temple
#3 Triad Center, Suite 550
Salt Lake City, UT 84180-1205
(801) 321-7205
or
Utah State Office of Education
250 East 500 South
Salt Lake City, UT 84111
(801) 538-7779
Vermont
Vermont Student Assistance Corporation
Champlain Mill
P.O. Box 2000
Winooski, VT 05404-2601
(800) 642-3177
or
Vermont Department of Education
120 State Street
Montpelier, VT 05620-2501
Voice: (802) 828-3147
Fax: (802) 828-3140
Virginia
State Council of Higher Education for Virginia
James Monroe Building
101 North Fourteenth Street
Richmond, VA 23219
(804) 786-1690
or
State Department of Education
P.O. Box 2120
James Monroe Building
14th and Franklin streets
Richmond, VA 23216-2120
(804) 225-2072
Washington
Washington State Higher Education Coordinating Board
P.O. Box 43430, 917 Lakeridge Way, SW
Olympia, WA 98504-3430
(206) 753-7850
or
State Department of Public Instruction
Old Capitol Building, P.O. Box FG 11
Olympia, WA 98504-3211
(206) 753-2858
West Virginia
State Department of Education
1900 Washington Street
Building B, Room 358
Charleston, WV 25305
(304) 588-2691
or
State College & University Systems of West Virginia Central Office
1018 Kanawha Boulevard East, Suite 700
Charleston, WV 25301-2827
(304) 558-4016
Wisconsin
Higher Educational Aids Board
P.O. Box 7885
Madison, WI 53707-7885
(608) 267-2206
or
State Department of Public Instruction
125 South Wester Street
P.O. Box 7841
Madison, WI 53707-7814
(608) 266-2364
Wyoming
Wyoming State Department of Education
Hathaway Building
2300 Capitol Avenue, 2nd Floor
Cheyenne, WY 82002-0050
(307) 777-6265
or
Wyoming Community College Commission
2020 Carey Avenue, 8th Floor
Cheyenne, WY 82002
(307) 777-7763
Puerto Rico
Council on Higher Education
Box 23305, UPR Station
Rio Piedras, PR 00931
(809) 758-3350
or
Department of Education
P.O. Box 759
Hato Rey, PR 00919
(809) 753-2200
Virgin Islands
Virgin Islands Joint Boards of Education
Charlotte Amalie, P.O. Box 11900
St. Thomas, VI 00801
(809) 774-4546
or
Virgin Islands Department of Education
Office of Federal Programs
No.44-46 Kongens Gade, Charlotte Amalie
St. Thomas, VI 00802
(809) 774-0100
CNN and Money Magazine College Calculator
www.cnn.com/business/calculators/college-savings-calculator
Smart Student Guide to Financial Aid
www.finaid.org
You will find everything you need, including calculators to help you with the math on loan payments and college cost projections.
For parents and grandparents who are saving or currently paying for children's educational expenses (either college or, as of 2002, secondary or primary school educational expenses), there are new and quite beneficial privileges for you in the bill as well. As of 2002, for example, there's a new $2,000 per-child annual ceiling (up from $500) on contributions to an Education IRA; and for the first time ever, starting in 2002, contributions and earnings can be used to pay for tuition, tutoring, and other expenses for grades K-12 as well as for college expenses. Although the money you contribute to an Education IRA is still not tax deductible, as of 2002 the earnings will be tax free if spent on qualified educational expenses. Furthermore, as of 2002, using money from an Education IRA no longer disqualifies you from taking a Hope Scholarship or Lifetime Learning Credit in the same year (as long as the Education IRA money and the tax credits are not used for the same expenses). Also, starting in 2002, the income cap to qualify for an Education IRA will go up to $110,000 for single filers and to $220,000 for married filers (from $95,000 and $150,000, respectively, in 2001). For these reasons, I have now switched from not liking Education IRAs to liking them very much as an education savings program.
Another example: Starting in 2002, any earnings that accumulate in any Section 529 college-savings plan will be income-tax free when used to pay qualified expenses for a child's higher education, including payments for tuition, fees, room and board, and books. (If you have a child and don't know about Section 529 plans, you should. For a description of them, please see the ASK SUZE book on Planning for Your Future, pages 107-111. For the most thorough discussion anywhere of Section 529 plans and the new tax bill's effect on them, please see Joe Hurley's Web site, savingforcollege.com.) By the way, given this new tax advantage for Section 529 plans, there is now no reason whatever to save for college via a Uniform Gifts to Minors (UGMA) or a Uniform Transfer to Minors (UTMA) account. In my opinion, these accounts are now obsolete.
A third new benefit: Beginning in 2002, for the first time, up to $3,000 annually (rising to $4,000 annually in 2004) of any money you spend directly on qualified higher education expenses will be deductible from your income on your tax return (if you earn $65,000 or less a year for single filers or $130, 000 or less a year for married filers).
Yet, let me stress once again that these new education and retirement-savings benefits are set to expire in 2011 and may be repealed at any time before them. So please, please, please learn about them now and act on them immediately.
It's really hard to believe. September is almost here, and the kids are getting ready to go back to school. For many of you, the school that we are talking about is college. But even if it's primary school, sooner rather than later, college tuition will loom large for every parent out there. Today private colleges can run as much as $35,000 a year. So if educating your child is one of your priorities, the time to save is now.
In my opinion, the best way to do this is with a so-called 529 Savings Plan. Below is an article written for you by Joseph Hurley. Joe is the author of The Best Way to Save for College: A Complete Guide to Section 529 Plans. He is quoted frequently in newspapers across the country as the nation's expert on 529 Plans, and it is an honor to have him participate in our newsletter. Please read what he has to say carefully.
How to Use a 529 Plan to Save for College
By Joe Hurley
If you're saving for college, there is one particular type of investment program that you need to know about. It's called a "529 plan" and it is a college savings program run by a state. Your own state is likely to have a 529 plan, because currently there are 41 states operating these plans and seven more states in the process of developing them. Only Georgia and South Dakota have failed to enact legislation authorizing a 529 plan.
Here's what you get with a state-run 529 plan. Your money is invested either in a contract that promises to pay for at least part of the future tuition costs for your child (this is called a prepaid tuition plan) or in a mix of stock and bond mutual funds (this is called a college savings plan). Either way, the value of your investment grows tax-free until withdrawn. In the years when withdrawals are used to pay for college costs, the growth is taxed to the student, not to you.
The combination of tax-deferred growth and your child's lower tax bracket can provide a significant financial benefit to you. And don't be concerned that the 529 plan only works when your child is sure to attend an in-state public college or university. Your account can be used to pay for any accredited college in the country, and probably graduate school as well.
When thinking about 529 plans, there are at least two major decisions to make. One is whether a 529 plan is a better way to save than other options available to you, such as an education IRA, a custodial account under the Uniform Transfers to Minors Act, or U.S. Savings Bonds. The other decision is which state 529 plan to use.
There are two dozen states that make their college savings plans available to everyone no matter where you live, and you can even have accounts in more than one state. Since every 529 plan is unique, you may find program features and investment choices in other states that appeal to you more than those in your own state. For instance, some states have hired an investment company, such as Fidelity, Merrill Lynch, or TIAA-CREF, to design and manage the investment portfolios that hold your money. Other states manage the funds within their own agencies. Here are some of the things you should compare when shopping for a 529 plan:
- The level of investment risk and potential return
- The cost of participating in the plan
- The quality of the program materials
- The ease of changing account beneficiaries or the account owner
- Any age restrictions or limits on the types of education expenses covered
- How to get out of the plan
How to get out of the plan if you want to later on
(if you want either to change to another state plan or pull the money out because the beneficiary no longer needs it for college)
Be sure to look at what you would be giving up, however, if you decide to invest in another state's plan. Your own state may offer special state-level tax benefits, financial aid advantages, or even matching contributions to you for using the in-state 529 plan.
If you make a contribution to a 529 plan, you are not allowed to make a contribution to an education IRA for the same child. For many families, the education IRA is not a very attractive vehicle, anyway. A 529 plan allows you to contribute $100,000 or more for each beneficiary regardless of age or income level. An education IRA limits contributions to $500 per child and places age and income limitations on participants. Even worse, the tax exempt withdrawal of funds from an education IRA prevents you from claiming the Hope Scholarship or lifetime learning credit.
Custodial accounts are popular as a way for parents and grandparents to hold taxable securities and shift any taxable income to the minor child. The huge advantage that a 529 plan has over a custodial account is that you, the account owner, will always have control over the 529 plan account. Your child has no right to the account even after he or she turns 18 or 21. In addition, the 529 college savings plan is treated much better in determining eligibility for federal financial aid (prepaid tuition plans may fare worse, however).
If all this sounds confusing, it's because it IS confusing. One of the best sources of information about 529 plans can be found on the web at www.savingforcollege.com.
