Suze Orman, Financial Guru
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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. 
 

Smart Money College Planning
www.smartmoney.com/college

www.savingforcollege.com

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. 
 

USA Today 529 College Plans
A very comprehensive analysis of all of the 529 plans available out there on USA Today.

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
http://cgi.money.cnn.com/tools/

Smart Money Saving for College Calculator
http://www.smartmoney.com/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 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.


For those of you who want more information on other strategies for paying for college, check out the following Web sites:


A primer on tax-wise ways to save to college, including trusts, state plans, IRAs and aid packages - SmartMoney.com


Winning Ways to Get Scholarships and Grants - MoneyCentral.msn.com

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