When I was about 8 years old I remember driving past Fordham University in the Bronx and saying I wanted to go to that school. I knew nothing about it other than my older cousin was going there and everyone was really proud of her. I didn’t go to Fordham. I actually didn’t even apply to it. By the time I was applying for colleges it wasn’t one that interested me any longer. Still, that moment in that car is the first time I knew I was going to go to college.
I ended up going to Rutgers University – New Brunswick (another cousin had graduated from it right before I was applying to schools and took me to fall in love with the campus). My parents couldn’t pay for me to go to college. I needed financial aid, scholarships, loans and a job (or three). I remember at one point trying to get the University to lower my mandatory meal plan because I was worried I wouldn’t be able to afford to pay for it. They didn’t. I cried. Then I figured out how to pay for it by working extra hours over break and spending less on other things. As soon as I could I joined the RA staff to help with costs and made some really good friends. I graduated with honors in 2002 while working 2 – 3 days a week in the Bronx, working a few hours of financial aid, doing an internship for my major and being an RA.
A few years later while working full time and just getting my own apartment I decided to go for my MBA. I had to take out more loans. I wasn’t as good at juggling that time and was put on academic probation then my final semester I failed the last class I needed to graduate and wasn’t able to retake it because it brought my average down and they would no longer let me register. They still took my money though! (Not Rutgers where I probably should have went back to for my MBA, somewhere MUCH less prestigious). Even with that added debt I paid off my college loans about five years ago. Many of my friends have not. In fact MOST of my friends have not.
In fourteen years JustaBXgirl will be choosing her future. She will be choosing where she will go to undergrad (if she decides college is her path). Will I pay for it? Nope. Will I help in any way I can? Of course. I think there’s something about the transition from high school to college that has to come with a true sense of responsibility. I mean, at four I make JustaBXgirl pay for things she wants (albeit she gets most of her money by finding my change and singles around the house or from her grandmother). Still, she has to save up the little she gets and put some towards her bank account and can use the rest. At four she is understanding saving for wants. Education to me isn’t a want but the place you choose to get it might be. Being the mom that has her child pay her way at four do you really think she won’t be doing it at eighteen?
Even still I don’t want my baby to know the feeling of fear that money might cause her to have to give up a dream. I will always be there to be her safety net. And a great safety net for our children is the NY 529 Direct Plan (if you’re in NY. My out of NY readers your state probably has a different 529 plan check it out too). What’s the NY 529 Direct Plan? It’s an investment plan you can use for higher education costs. Read that sentence again. It can be used for higher education costs. That means it can be used for more than just tuition. Have you heard of the Excelsior Scholarship? It’s a new program beginning this year that will help many students in New York attend college for free. Hopefully the program will still be around when JustaBXgirl is choosing a college. And hopefully she will select one in New York State. The catch? It will only cover tuition. Tuition is not the only college cost! And the 529 plan knows it. A 529 plan can be used to cover 2 and 4 year colleges, vocational schools and even postgraduate programs (is there a doctor in the house???). And as I said it can be used to cover more than tuition. It can be used to cover books, supplies and even certain room and board fees.
I had heard about the plan in the past but always brushed it off because JustaBXgirl has a bank account I don’t touch. After attending an info session about the plan I learned that her bank account can actually hurt her when applying for financial aid but if I put that money in a 529 plan for her it won’t count as her asset but mine because I will be the account owner and she the beneficiary. There are a lot of other really cool things about the 529 plan. If you’re looking for a tax break the 529 plan has one waiting for you. If you’re single like me you can deduct up to $5,000 annually or if you’re married up to $10,000 is deductable annually. Who couldn’t use a tax break or two? But don’t worry, there isn’t some insane minimum to get this plan started. You can start an NY 529 plan with $25. Yup, you read that right. You can start saving for your little’s future with $25. That’s less than a weekly Metrocard in NYC. And you decide when you make deposits into the account. You can set up automatic deposits if it’s easier for you (in my life I need auto deposits. If I don’t see it, I don’t miss it). Or you can make one-off deposits. Other people can even make deposits through a Ugift link you share with them. Think about it. Birthdays, holidays, accomplishments rather than having to set up a wish list of things you know your little really doesn’t need you can ask friends and family to add to the college fund very simply by clicking a link.
And if you want to give a gift to someone else that doesn’t have a 529 plan? You can start a plan for someone else. Yup, grandma, auntie, godmommy, uncle, etc., I’m talking to you. You can start a 529 plan for a little in your life. You would be the owner of the account and set them up as beneficiary. Let’s say you set an account up for one of your littles and then they decide college isn’t for them or they get a full ride to the college of their choice. Do you lose the money you’ve been saving? Nope! You can simply change the beneficiary. And if you decide you just want the money back or need it back you can withdraw it from the account. You will however be subject to some penalties. Even the penalties though don’t come close to impacting the benefits to the account.
I won’t be the one footing the entire bill for JustaBXgirl to attend college but I also won’t see my baby fail. My plan is to help give her a solid foundation and help her to secure that foundation. I plan to put some money into her 529 but I also plan to have her put money into it as well. Chances are the way my bank account works she won’t be able to cover four years with what’s in the account but she won’t have to worry about leaving school because of a mandatory fee.