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Better Savings & Funding 

 There Is A Contrast Between College Savings With A 529 Plan Versus A Life Insurance Plan Geared For This Purpose:

Life Insurance 529 Plan
Annual Contribution Limit No limit $13,000
Taxation of Withdrawals Tax free, using loans (Even non-qualified uses, e.g. buying businesses). Tax free, qualified education expenses only.
Value included as asset in financial needs analysis
on FAFSA or CSS Forms
Can avoid inclusion Must be included
Funding for college if parent passes away or becomes disabled Death/disability benefit helps fulfill college savings goals. Account value may not be sufficient
Costs of managing the plan Higher (Includes life coverage). Lower (No life coverage).
Companies offering plans add scholarship credits for over 240 Sage Scholar member private colleges listed
on their website.
Yes Yes

If a family saves for college using a Sage Scholar affiliate life ins. company, 5500 scholarship points are earned upon issuance of their plan, then 2000 points each year the plan is in force.

Note that if students apply to colleges that are not Sage Scholar members, the track record of accumulating money and scholarship credits demonstrates the commitment of the student and family for college and should impress any college enrollment officer.  Please contact us in order to consult with a representative or agent for complete details covering the above strategies.

** No strategy for college savings is an optimal fit for everyone, but examples of third party discussions about return on life insurance come from these WALL STREET JOURNAL articles as an example:

Date & Page Title
3-12-09 / D1 Fusty Insurance Lures Buyers Seeking Safety - Whole-Life Policies Offer Steady Ride, but Figuring Actual Returns Can Be Tricky
3-5 & 6-10 / B8 Juicing Your Life Insurance
2-27 & 8-10 / B8 Whole-life Insurance, Long Derided, Gets New Lease

Also, since college planning does involve several specialty areas, do get input from your legal and accounting advisors.

 Are "Higher-Tuition" Private Colleges As Good A Value As "Lower Cost" State Universities? (Contact us for the full 5 page research report).

Cost Comparison Example: Public vs. Private College

Public Private
Tuition-List Price $6,900 $25,000
Living Costs, Texts $10,000 $10,000
Total Costs $16,900 $35,000
x5 Years to get BS* $84,500
x4 Years to get BS $140,000
Minus 1 Year at work* ($33,500)
Total Actual Cost $84,500 $106,500
Less: Potential scholarship credits from college savings 0 (20,000)
(Before what could be good endowment based scholarships thru our college planning).
$84,000 $86,500

Quality Differences Between Public And Private Colleges Could Also Be Considered:

  • Surveys of graduates show that a a lot more students at private colleges receive closer mentorship from professors or counselors.
  • Some private colleges are national leaders in offering a conservative, serious learning environment as opposed to being a “party” school.
  • On average, you are 61% more likely to graduate from private colleges.
  • One caveat: Some of the best large universities are top rated as where major employers like to hire graduates.  So check to see if your private college has a high placement rate for graduates in your major and what you have to do to build your resume to be like those who tend to get the good job offer

Building scholarship credits
Some colleges stand out by especially recognizing your year by year saving, as it is exemplary of the discipline
needed to be successful in college.  This particularly applies to students earning and saving some money along with parents, e.g., with summer work which can even include building your academic knowledge at the same time!
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