Be smart — start a college fund
By Ajay singh
Today Staff Writer
At a time when in-state undergraduate public universities charge an average of $5,132 in annual fees and tuition — the privates cost four times as much — a college education can seem like an unrealizable dream.
But it’s never too late to start a college fund, however modest, whether for your own children or your grandchildren.
That was the advice of José J. Mireles, a tuition financing consultant with TIAA-CREF, a nonprofit company that offers financial services to nonprofit institutions, including colleges and universities.
Mireles recently spoke at the Semel Institute auditorium about Golden State ScholarShare, a state-sponsored, tax-deductible college-savings program in which 159,000 individuals now participate. The event was organized by Campus Human Resources for UCLA employees.
The UC offers ScholarShare to its employees through TIAA-CREF, whose licensed consultants work without a commission and help people make financial decisions. Contributors may invest as little as $15 a month through payroll deductions.
The payoff can be sizable: A $100 monthly contribution adds up to $69,332 over 18 years, based on an 8% investment return and an initial deposit of $5,000.
All contributions go to one of five TIAA-CREF mutual fund options. A guaranteed option in annuities is the most conservative choice, said Mireles. Two of the options revolve around age-based asset allocation, while a third, a “100% social choice equity option,” steers clear of firms dealing in tobacco, firearms or unfair labor practices, Mireles explained. A number of changes have been made to the plan recently to improve its performance so that it keeps pace with the rising cost of college.
There are no application fees or annual charges, in contrast to similar, competing programs in other states where as many as 20 mutual fund options are available for a fee. Investments may be withdrawn anytime to pay for tuition, fees and qualified expenses such as books, supplies, board and lodging at any accredited college, university or vocational school, including some overseas.
If your child decides not to go to college after all, his or her college plan can be transferred to another family member, including yourself (the plan covers continuing education courses). For those who have no beneficiaries, the money is not lost and can be withdrawn after paying certain taxes.
For more information, visit www.scholarshare.com or call (866) 506-8774. |
