Oct 10, 2008 8:53 pm US/Pacific
College Funding More Difficult In Economic Crisis
GLENVIEW, Ill. (CBS) ―
This is a tough time for teens on the road to college. Some families are finding themselves scrambling for money as the economic crisis grows.
You used to be able to rely on student loans to help get through the college years. But now lenders are offering fewer federal and private loans. College savings plans can be a good way to go, but even they aren't safe from the frenzy on Wall Street, reports CBS station WBBM-TV in Chicago.
WBBM reports some high school seniors, like those at Glenbrook South High School in Glenview, are feeling the crunch.
The Friday night cheers are a way for some families to tackle their stock market fears. Parents at the big game in Glenview said they're worried about fickle financial reactions on Wall Street because it's affecting college tuition investments for their kids.
"We have one that just started in college, we have one in high school and one in 8th grade. So, yeah, we're in that situation of needing those funds to turn around," said parent Carolyn Grieve.
She's saving through two state-sponsored plans, or 529s – both the prepaid plan, which locks in today's price for future tuition, and the investment plan, where your contributions are invested on the market.
That market-based account is scoring on the losing end right now.
It's something the parents of a cheerleader are stepping through, too. But for her mom the state's plans carry too many rules.
"We're doing our own savings. Savings accounts. And we're looking at CDs right now," parent Julie Benson said. She says her accounts are fine.
Financial planners are pushing more parents to look for the decent returns with little risk.
"If one is saving for the future, one must be conservative right now because no matter how intelligent your advisor is, I think there's so much uncertainty going on that there are very few so-called experts out there who know what's going to happen," Wayne Brezon said.
His advice is to think about moving the money around within your savings plan if you can, but the state-sponsored plans typically only allow that once a year.
It's also a good idea to have your kids apply to as many schools as possible to shop around for the most financial aid you can get.
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