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by Alexis Mattera

The true cost of a college education is seldom the number that’s printed in school brochures and on various college comparison lists. When you figure in federal aid, scholarships, grants, room and board, books and supplies, that price fluctuates. One thing remains constant - higher education doesn’t come cheap - but a new poll finds students are willing to stretch their finances for several key factors.

In April, right up until enrollment deadlines, students were still considering “too expensive” schools and were willing to stretch to pay for their education, poll conductors the College Board and the Art & Science Group report. While it would be more financially sound to select the school with the lower tuition and better financial aid package, “too expensive” colleges remained in play if they had strong academics in students’ fields of interest, were places students felt comfortable, had prestigious academic reputations or had excellent records of graduate school acceptance or good job placement after students graduated. Here’s the breakdown:

• Twenty-six percent of students surveyed said their family would have to stretch a lot, but “I think we’ll make it.”
• Twenty-two percent chose “I’m not sure how my family will afford to send me to college, but I believe we’ll work something out when the time comes.”
• Eleven percent said, “I don’t think my family can afford to send me to college, but we are going to try.” Nearly 40 percent of students surveyed did not have a sense of long-term costs, citing “no idea” what their likely monthly payment on student loans would be after graduation.

If you think back to every award show you’ve ever seen, you’ll recall those who do not win always say it is an honor just to be nominated. The same can be said for college admissions: It’s an amazing achievement to be accepted to a prestigious college but is attending worth it if the cost of attendance is going to drive you and your family into debt?

by Emily

Today is May 29, also known as "529 College Savings Day," named after 529 plans, which are popular state-sponsored college savings plans.  Today has been designated as a day to raise awareness of the importance of saving for college, as well as ways to do so. While 529 plans suffered along with everything else in the stock market, they are still being emphasized as a valuable tool for saving money for college.

According to a poll conducted by Gallup and Sallie Mae, 62 percent of families with college-bound children are already saving for college in some capacity, with the majority planning to contribute at least half of a child's tuition.  About half of families that are saving already regularly contribute to college funds, and around a third use state 529 plans.  The Chronicle of Higher Education has more information on the survey, as well as a link to the results.

If you're curious about college savings plans, we have some resources to help you get started.  A few months ago, we did a couple blog posts on saving for college, featuring a discussion of 529 plans, as well as other savings options.  While the focus of today is on saving for college, it's also a good time to look into college scholarships, especially for students still in high school.  Read up on college savings accounts today, then do a free college scholarship search to find more options for paying for school.

by Emily

Paying for college can be a struggle.  Nobody wants to repay student loans forever, not everybody is going to land a full-tuition scholarship, and federal student financial aid seldom takes care of all college costs.  If you're a parent or relative looking ahead to cover college costs for a child, finding scholarships is a great step now, but you may also want to consider college savings plans.

Read below for information on 529 savings plans, which are one of the most popular and diverse options for college savings.  If this is not for you, check back tomorrow for more information on other savings options.

529 Savings Plans While 529 plans have sustained average losses of 21 percent in the last year, they can still be a good idea, especially if you choose your plan carefully and have plenty of time to save.  Many 529 plans allow you to move your savings into a much more conservative portfolio when the student nears college, an option they're sure to publicize based on the recent behavior of the stock market.  While there are limits on how many changes can be made to a 529 plan per year, the plans are otherwise quite flexible and varied, so it's easy to find one that works for your situation. Plus, 529 plans can be taken out in the parent's name, rather than the student's, so they will only minimally affect a student's financial aid eligibility.

Additionally, contribution limits are high, income limits are nonexistent, minimum contribution requirements tend to be low, and many states offer a variety of incentives for residents who contribute to their plans.  As an added bonus, many 529 plans can accept contributions from anybody anywhere, not just the people named on the account, and several programs have been created to take advantage of this.  For example, some plans allow a portion of credit card purchases or purchases at certain stores to go towards a particular student's 529 plan.

Prepaid Tuition Savings Plans If you're hesitant about sticking money for college in the stock market with uncertain returns, another type of 529 plan is also gaining popularity.  Prepaid tuition plans allow families to contribute a fixed amount now in exchange for a certain portion of tuition being covered in the future.  Many states do this for their state colleges and universities, and the Independent 529 plan, which is accepted by over 200 private colleges, also fixes contributions to portions of future tuition.  Both of these varieties eliminate worries about tuition inflation, though if tuition actually goes down between now and when the student starts college, a prepaid plan might not be the most lucrative option.

The Down Side 529 plans do have drawbacks and limitations.  Money must be spent on education, and the expenses that qualify are limited to undergraduate tuition, fees, educational expenses like books, and now computers. However, if the student is enrolled at least half-time, money from a 529 plan can also go towards room and board, so even if your student earns a full-tuition scholarship, it's possible to still take advantage of 529 savings.  Money must stay in a plan for at least 3 years, so if you're saving for a college sophomore, you're out of luck with these.  However, you can transfer the unused portion of a 529 plan to another family member without incurring the heavy withdrawal penalties, and it may also be possible to use the funds towards graduate or professional school.

Plans also vary from state to state, so your state's plan might not have the best benefits for you, or might not offer as sweet a deal in terms of tax breaks or low fees as the next state over offers its residents.  Luckily, you can shop around among a variety of plans, including ones offered by several other states.

529 plans are not the only college saving option, though they remain the most popular and perhaps the most well-known.  Check back tomorrow for information on the rest of the pack.

by Emily

Continuing our theme from yesterday, today's blog post centers on more options for saving for college.  Yesterday, we discussed 529 plans, popular college savings vehicles that have been battered by recent financial troubles.  If you're considering saving for college but are not sold on a 529 plan, the most common alternatives are discussed below.

Coverdell ESA. Coverdell Education Savings Accounts are similar to 529 plans in most respects, but do have their own benefits and drawbacks. Rather than being sold by a state, they are sold by banks and brokerages, which can charge their own management fees. Because there aren't any state ties, there aren't any residency limitations, though there also aren't any state tax breaks for enrolling in a Coverdell ESA.

Coverdell accounts allow more flexible investment options and unlimited changes to investments. They can also be used to pay for high school and elementary school expenses, in addition to college costs. Otherwise, the expenses Coverdell and 529 plans can be used for are roughly the same: tuition and fees, books and supplies, room and board if over half-time, and other qualified educational expenses.

One major limitation to the Coverdell ESA is the $2,000 annual contribution cap. This is the limit per account holder, not per contributor. Additionally, individuals must have an adjusted gross income of $110,000 or below to contribute, and $95,000 or below to contribute the full $2,000. Coverdell accounts are held in the beneficiary's name, so they can hurt the student on the FAFSA. They also must be used or cashed out by the time the beneficiary turns 30, and they go to the beneficiary no matter what, while 529 plans can be given back to the parent in charge of the account if the student chooses not to go to college.

Roth IRA. The Roth IRA, typically used as a retirement account, can also be used to save for school. As long as you're withdrawing contributions, rather than earnings, there is no penalty if you are using the money from your IRA for educational expenses. However, a college savings plan might be the better way to go if you're setting up an account specifically for your student (especially since contributions to a Roth IRA must come from income the beneficiary earned from working), and dipping into your retirement funds to pay for college is widely regarded as a less than ideal choice by financial experts. But if you choose to take it, the option is there.

UTMA. The Uniform Transfer to Minors Act allows assets to be given as gifts to minors without the establishment of a trust. While the options explored up to this point have been savings accounts or investments, UTMA covers everything, including property. An adult manages these assets in a custodial account until the owner reaches the age of 18 or 21, depending on the state. In the meantime, the funds in the account can be used to benefit the child, including taking care of educational expenses. Once the owner reaches the age of majority, the assets are theirs to use as they please. This can mean paying for school, or it can mean making less desirable financial choices.  Since these assets belong to the student, they would count against them for student financial aid.

Government Bonds. While typically regarded as the province of grandparents, government savings bonds (Series EE is the most common) are also an option for paying for college. Bonds can be purchased online or at banks, and redeemed later for cash. As opposed to stock market-based savings plans which can lose big during crashes, government bonds are going to continue to grow as long as there's a government to honor them. And if there's no longer a United States government, well, you might have more to worry about than paying for college.

Also, since no rules state that a savings bond must be redeemed for college costs, the money can be used towards paying off student loans, covering college living expenses...or partying it up during spring break in Mexico.

While EE Savings Bonds grow at a steady rate, they do grow very slowly. You're also limited to a purchase of $5,000 per calendar year. Since they're such a safe bet, they can be great gifts for high school students, but a market-based option might be a better way to grow savings and maximize returns for younger children.

by Alexis Mattera

No, there are still no classes entitled “The Anatomy of the Victoria’s Secret Fashion Show” or “The Hanukkah Snuggie’s Effect on Modern Judaism” but classes with roots in popular culture are popping up on college campuses everywhere. If you’ve yet to select your classes for next semester or have found a few empty blocks in your schedule, consider enrolling in one of these fun, weird and surprisingly informative courses. (Bonus: They could help you earn an equally unusual scholarship!)

• Consumerism and Social Change in Mad Men America, 1960-1963: Northwestern University history professor Michael Allen teaches this freshman course, which examines the relationship between consumerism and the social and political changes of the 1950s and 1960s. Students attend lectures and read historical texts but are also required to watch several “Mad Men” episodes each week. We’d assume cigarette smoking, scotch swilling and infidelity do not earn extra credit points.
• South Park and Contemporary Issues: This course at McDaniel College mixes sociology and philosophy while exploring the controversial contemporary social issues featured on the long-running Comedy Central cartoon. The official course description states, “Ultimately, students will gain…new knowledge of the benefits of applying an interdisciplinary approach to contemporary social issues.” No Kennys will be harmed but bring your own Cheesy Poofs.
• Music, Video Games, and the Nature of Human Cognition: This NYU psychology class already has a waiting list and there’s a good reason for it: Professor Gary Marcus believes video games – specifically “Guitar Hero” – can be used to enhance human cognition. Some parents are upset that this is the type of class their tuition is going toward but Marcus stresses that delving into this understudied area will yield positive results. Rock on, Professor!
• Lady Gaga and the Sociology of Fame: The University of South Carolina’s Mathieu Deflem has gone gaga for Gaga and he hopes his students will too with his sociological analysis of selected social issues related to the pop star’s work. Though the course is within the sociology department, the subjects of music, fashion, art, business, marketing, new media, religion and politics will be integrated to dissect Gaga’s rise to fame and impact on society. Unlike the infamous meat dress, this approach is well done.
• Zombies in Popular Media: Vampires are so last year, people, and Columbia College Chicago has the latest undead trend – zombies – ready to take over your brain, not eat it. Literature, comics and film will “foster thoughtful connections between student disciplines and the figure of the zombie,” states the course description and the history, significance and representation of zombies will be discussed and implemented on a daily basis. Hopefully, this class doesn’t take place after dark.

by Kara Coleman

Hi! My name is Kara and I’m really excited about being one of the newest Scholarships.com virtual interns!

I have spent the past couple of years studying at Gadsden State Community College. I live at home with my parents and commute to school and work every day. I attend Gadsden State because it is affordable, close to my home and workplace and I don’t have to pay room and board expenses. I plan to transfer to Jacksonville State University for many of the same reasons: JSU offers everything involved in a “normal” college experience, like clubs and football games, but I can choose what to participate in while still meeting the demands of my work schedule and being able to watch my little brothers’ soccer games.

Ever since I could hold a pencil, I have loved to write. My dream has always been to write a New York Times bestseller but until that happens, I would like to have a job that involves writing. When I enrolled at Gadsden State, I declared myself as an English major. I took every literature class that Gadsden State had to offer and I even spent the past year tutoring English. At JSU, I intend to major in communications, with concentration in print journalism. I think that writing for a newspaper will give me a consistent day job while I write books on the side.

When I received the email stating that Scholarships.com was looking for virtual interns, I immediately began composing my writing sample. This opportunity will allow me to do what I love, add some bylines to my portfolio, and (hopefully!) give me some more exposure as a writer. I look forward to sharing my transfer experience and helpful hints with anyone who visits the site over the coming months. “Talk” to all of you soon!

by Lisa Lowdermilk. Scholarships.com Virtual Intern

For many students fresh out of high school, the idea of going to a community college is not appealing. After all, one of the most exciting aspects of attending college is living on campus away from home, right? Well, living on campus may not be all it's cracked up to be.

Although few people would argue that universities' clubs, fraternities and parties are superior to anything offered at a community college, the stress of being away from home for the first time, learning to live with one or more roommates and being forced to make new friends can be quite an adjustment. Community colleges help students ease into the transition between high school and college more gradually.

Then there’s the cost: Tuition at a community college per year costs $2,713 per year, whereas four-year universities cost $7,605 per year on average. This second figure assumes you're living in-state but if you're living out-of-state, expect to be set back about $11,990 your first year. If cost is the major deciding factor, your decision is easy: Go to a community college for your first two years, then transfer. With all the extra money you're saving, you can throw your own parties, buy that new car you've been wanting or just save up for when you do go to a university.

Even if you're not going to your dream school for your first two years, you'll still have the opportunity to experience campus life after you get your associate degree at a community college. And who knows? Maybe you'll even find out community colleges aren't as bad as they're made out to be!

Lisa Lowdermilk is a soon-to-be published author, an avid video gamer and an artist. Her first novel is a murder mystery for young adults set in the future. She enjoys watching thrillers, trying different restaurants and attempting to breakdance. Lisa completed her Associate of Arts degree entirely online and is now majoring in professional writing at the University of Colorado Denver.

by Agnes Jasinski

Pittsburgh city officials have received some criticism over the last few days on their latest plan to cover local budget deficits and shortfalls: a tax on college students.

The 1 percent tuition tax, described as the "Post Secondary Education Privilege Tax" or Fair Share Tax," would target local college students and, officials say, raise $16 million for the city to cover things like city employees' pension funds and costs associated with the public library system until the city is able to get a handle on its budget problems. Pittsburgh has 85,000 students in 10 colleges and universities that would be affected by the tax, attending schools like the University of Pittsburgh, Duquesne University, and La Roche College.

City officials justify the measure with the argument that college students should be paying for the services they use as already residents do. According to a Wall Street Journal article on the issue this week, the tax would range from $27 for students attending the Community College of Allegheny County, to as much as $409 for students at Carnegie Mellon University.

The students don't seem to be taking the news lightly. On Monday night, about 100 students came to a Pittsburgh City Council meeting to protest the measure, calling the idea "Taxation Without Representation" and a "double tax" on those who already pay other taxes, such as property taxes, sales taxes, and fees associated with water use and tickets to sporting events. Critics also argue this is a terrible time to be imposing more fees on students, as post-secondary tuitions continue to rise, student loan debts continue to increase, and the job market only becomes more competitive for recent graduates.

As a response to the students' concerns, the state legislature is already looking for alternatives to the tuition tax through a proposal called the Non-Profit Essential Services Fee Bill. The bill would place a mandatory fee on nonprofit institutions' real estate profits. Many nonprofits already contribute to municipalities voluntary, so lawmakers hope this plan would be less controversial. The nonprofits would have to choose where to cover those costs of the additional fees if they do not already contribute voluntary, however, and if that nonprofit is a university, students could still be expected to cover that services fee bill.

Discussions now will explore whether such a tax is even legal, as tax attorneys disagree about whether a city may tax a population just for being in those city limits, usually temporarily. Also, is it fair to tax one student more than another, just because they attend a school with a higher tuition? If the tuition tax was approved, it could go into effect next year.

by Alexis Mattera

Current high school and college students are probably too young to remember when MTV actually played music videos. It was a glorious time for sure but after hearing this next announcement, I think they will like the network’s new direction just fine.

The NYT’s The Choice blog revealed that instead of launching another mind-numbing reality show, the music channel and the College Board have joined forces for the Get Schooled College Affordability Challenge. The contest – which is being underwritten by the Bill & Melinda Gates Foundation – is open to current and potential college students interested in creating an innovative digital tool that will help more students obtain funds for school. The prize for the winning individual or team? A cool $10,000, as well as a $100,000 budget to bring their idea to life.

A statement released yesterday stated the contest was created to make it easier for students “to navigate what can be a confusing financial aid maze.” This metaphorical roadmap will definitely be a useful one: Each year, countless students are forced to postpone or abandon their dreams of higher education because they cannot pay for school but the Get Schooled creators hope their program will play a role in raising college completion rates.

The contest will run through December 17th so if you think you have what it takes to win, submit your idea here. Best of luck to all who enter!

Earlier this week, the National Association of Independent Colleges and Universities released information on tuition increases at private colleges and universities for the 2009-2010 academic year. While tuition is increasing on average, the good news is that the tuition increase is the lowest in 37 years.

Tuition and fees are projected to go up an average of 4.3 percent at private colleges and universities nationwide, with some colleges managing to hold their increases even lower or freeze tuition rates to help students struggling to pay for school in the current economic climate. While it still greatly outpaces inflation, it's lower than the average increase over the last 10 years, which has been around 6 percent. The survey did not address changes in the cost of room and board.

Meanwhile, private colleges are also increasing institutional grant and scholarship aid. On average, schools allocated 9 percent more to college scholarships and grants for 2009-2010 than the previous academic year.