Are you satisfied with the 529 plan you chose, and the investments you’ve chosen within the plan? You are allowed to make changes once a year — selecting a plan in another state if you want, or different investments in the plan. Remember, you don’t have to stick with the plan in your state, although many states give you an extra tax break if you do. And you can save money if you go to a state 529 plan directly rather than using a financial adviser. According to Morningstar, the average cost if you do this on your own is about 0.60 percent, but with an adviser it’s 1.5 percent — a much higher amount that will detract from the amount you amass.
If you have been getting raises every year, consider increasing your contributions to the 529 plan — maybe setting up your account to move money automatically each payday. Also make sure you tell Grandma and Grandpa not to open any accounts in the child’s name under the Uniform Gifts to Minors Act or Uniform Transfer to Minors Act. If your child is going to qualify for financial aid when he or she goes to college, a UGMA or UTMA will poison his chances.
Want to know if you are likely to get financial aid? For a ballpark idea, try the “estimated family contribution” calculator at the college you think your child might attend or try FinAid.com’s calculator, at www.tinyurl.com/finaidest.
Meanwhile, now is the time to start looking for college scholarships. You might think that’s crazy, but a few are available for children as young as 6. Among them: Kohl’s Kids Who Care and Doodle 4 Google, an art competition that provides $15,000. FinAid.com has more information at www.tinyurl.com/finaid13.
• Starting high school: Parents often don’t start thinking about college until their children are seniors in high school, and college acceptances start arriving with horrific costs in them. That’s tragic.
By senior year in high school, they have missed the greatest opportunities for winning scholarships and adjusting household finances so families are in the best position to maximize the financial aid colleges will give them. It’s critical to get ready to seek scholarships before your child’s sophomore year in high school because many deadlines arrive during the fall of that year.
If your baby had no interest in a bat and ball, you don’t have to worry. Your search for scholarships will reveal that there’s something for everyone who’s willing to work at it — from tall children to left-handed people, bowlers and golf caddies, and David Letterman’s award for average students. Find the most unusual scholarships at Unusual Aid and the most prestigious and high-paying like Intel’s $100,000 at Prestigious Aid.
Two valuable scholarships sites are Fastweb.com and Scholarships.com.
Along with your scholarship search, start having your child record all activities and honors. Scholarship applications and college applications require a list of activities and references from people who saw your child excel.
Read Secrets to Winning Scholarships by Mark Kantrowitz and How to Go to College Almost for Free by Benjamin Kaplan for strategies on winning scholarships. The same strategies will also help your child write winning college application essays, and scholarships help gain admission to college.