Savings for a college education is one of parenthood’s biggest hurdle because tuition fees are rising faster than inflation. Imagine a family having a brood of 5 who expectedly will go to college someday. It is a financial burden not to be taken lightly and every parent should be prepared. Although there are student loans available, it is better to have an educational plan that will not unduly burden the graduate with loan repayments while trying to get employed after schooling.
The U.K. has one of the best educational plans of any country right now for its citizens. It passed legislation that helps parents prepare for their children’s future with a “Child Trust Fund”. The government knows that parenting is an expensive proposition for most so it gave £250 at birth to every child born on or after August 31, 2002 to be invested and becomes available only after the child reaches the age of 21. It can be used to pay off student loans if any were incurred.
Like the Philippines, the U.S. also has its own version of educational plans which can be either prepaid or savings. These plans are very flexible and can be used in any college in any state within America. The Philippines has a somewhat sad experience with education plans because the firms who sold pre-paid plans went bankrupt. The firms were privately owned but what screwed up a good concept was that inflation rose much faster than the returns these plans were earning from investments. The mad scramble to earn returns higher than the inflation rate caused the educational plan firms to invest more in riskier instruments which did not do well. The real culprits can be said to be inflation which made tuition fee increases inevitable and the wrong investment decisions made by the firms themselves. The result is a slew of mass-action suits against 7 firms with more than a million planholders adversely affected. For more on this news:
http://www.pcij.org/blog/?p=872
It seems the lesson learned here is to hold on and control your own money rather than let someone else do it for you. This is where the discipline and consistency comes in when it comes to savings. Plans that promise guaranteed education can fail at any time and parents were left holding the empty bag. The U.S. experience with education plans is somewhat different in that the funds are controlled by state treasurers or are managed by experienced program advisors. Well, it is not an absolute guarantee either. Better to save for it yourself.
No Comments »
Leave a comment
www.campsinternational.com
share your skills and knowledge to those who need help in Africa. Participate in our gap year programs and you will never regret the experience!
www.unifo.co.uk
if you are trying to make the right decision in terms of postgraduate university courses in the UK, we can help.
Recommended Sites | |
Health Insurance Quotes - Get Instant Health Insurance Quotes and buy online, fast and easy. | platinum engagement rings - best platinum engagement rings with great value only here in 365. |