| Sargent & Lundy Savings Investment Plan |
| YOUR CHILD'S EDUCATION |
| The following excerpts are from a T.
Rowe Price advertising section in the October 20, 1997
issue of "Newsweek" magazine. The opinions
expressed may or may not reflect those of the SIP
Committee. Saving for a child's education is a great challenge for most people. Many parents are also saving for their own retirement at exactly the same time, which can create a double anxiety. But careful planning can make college funding manageable - a challenging but feasible part of your overall financial strategy. Starting Early Your first step in a sensible college savings plan is to quantify how much you'll need to pay for anticipated college expenses at a certain date. Time is the great multiplier of invested money, and the more time you have, the less you have to save each month. If you start saving when your child is very young, you may find that you will need to put aside dramatically less per month than if you start saving closer to your child's enrollment. Choosing an Affordable College Elite private universities (or topflight out-of-state public universities) have much to offer, but if your son or daughter wants to pursue a specific interest, a less-expensive university might actually have the better program. Don't overpay for something he or she doesn't need. People in the field will know what the leading programs are and won't be impressed by expensive institutions. Insisting your child attend a "famous name" college could be a mistake, and impose a needless financial burden. Determining How Much You'll Need Most colleges will provide you with a list not only of current costs, but also projected costs for the year your child expects to enter college. Don't neglect estimating other expenses, such as travel costs; these may vary more significantly than tuition over the next 20 years. Developing a Savings Program The most common method of saving for college for non-wealthy Americans is to use long-term, systematic savings. This does not involve complicated investment strategies, but does entail sitting down, figuring out about how much will be required from you to enable your child to attend a good college and planning how much to start saving per month in various investments, computing the rate of return and choosing which ones will best help you meet those needs. Borrowing to Pay for College Chances are, however, that you will have to borrow somewhere to help pay for college. Qualified plan 401(k) loans, home equity or life insurance are options, as are Stafford Loans, Sallie Mae (SLMA) government loans or Extra Credit loans through College Board. The Education Resource Institute (TERI) also offers low-cost loans. Obtaining Financial Aid and Scholarships Many parents are surprised to learn that scholarships are available even to families with high incomes. A variety of scholarships are usually available from colleges and universities, awarded for a wide range of special talents, interest, geographical areas, grades or activities. Most larger universities also offer free graduate tuition for students willing to work as teaching assistants. Check thoroughly at the institution: many lucrative scholarships go uncollected simply because no one thinks to ask. When you have a child ready to enter college, you should look into the Free Application for Federal Student Aid (FAFSA) at 1-800-433-3243 and fill out a financial aid profile. Helpful telephone numbers to help obtain financial aid and scholarships: College Board 1-212-713-8000 College Scholarship Services 1-609-771-7725 FAFSA Questions and Information 1-319-337-5665 Federal Student Aid Hotline 1-800-433-3243 Student Loan Marketing Association 1-800-831-LOAN |
This page updated on 10/27/97