Rooting for the (Mason) Patriots
This past weekend, we went with friends to a George Mason Patriots women’s basketball game—it was a very exciting game, with the Patriots winning with a last minute buzzer beater shot. Melanie and the boys really enjoyed being so close to the action, and after the game, the players came out into the stands to meet and greet:
It was a neat touch—and Melanie lingered after the game to watch the girls hanging out, finishing interviews, talking to family and friends, etc:
While the game was fun, the best part was hearing Melanie and her friends talk about college on the way home—visiting the campus and meeting the players made them all excited about their college career to come…all of the parents started talking about the cost of college and how to afford it!
While the cost of college may come down in the future (as it continues to be debated on a national political stage), at the moment, parents are still worried about providing a college education to their children. While the headline tuition cost of most universities causes sticker shock, breaking down how American families pay for college is slightly more comforting. According to the 2018 Sallie Mae study, about one half of college costs were paid by parents and students. The other half of the college cost was paid by a combination of scholarships and loans.
As to the parental contribution, 529 College Savings plans have made it easy to start saving for college. Virginia’s 529 inVest plan is one of the best plans in the nation, with low costs and well diversified investment options. Virginia residents can deduct up to $4,000 of contributions per account on their Virginia income tax returns. All of the money in the plan grows tax free if withdrawn for education expenses…the definition of which has been expanded to include:
- tuition and fees
- room and board
- school supplies
- computers, peripheral equipment, software and internet service
Also, up to $10,000 may be withdrawn for tuition in connection with enrollment or attendance at an elementary or secondary public, private or religious school, including homeschool. Pretty cool deal.
Meridian is happy to help build a college savings plan, and there are also great online resources like this calculator. Generally, we will help clients figure out the optimal monthly savings amount to be on track to cover 35-60% of a child’s tuition cost…and often, when that monthly savings number is scarily high, we encourage them to just start with an amount that they are comfortable with…the Virginia plan allows recurring automatic deposits with no minimums. Once that baseline savings is in place, it is easier to increase those monthly contributions by $10 to $25 every few months or so!
Paying for college can seem overwhelming, but small steps count…as we encourage the Yakel kids to keep practicing basketball so they can get good enough for scholarships… 😊