Paying for College – Financial Planning Strategies

Before College – Planning

Generally, consider gifting your income generating assets to your child. The income earned by these assets would be subject to a lower tax rate than yours. However, with the enactment of kiddie tax, the unearned income of your child over $2,100 is taxed in the parent’s marginal bracket.

Investing in bonds may be one way to plan for your child’s future. There are several types of bond investments available in the market today. Tax-exempt bonds or tax-exempt bond mutual funds pay interest that is tax-free.

Another type of bond to consider is Series EE bonds. This type of bond has two interesting characteristics. Interest is only taxed when the bond is exchanged for cash. Additionally, interest earned can be exempt from tax if the bond is issued in the parent’s name and the proceeds are used for qualified college expenses such as tuition, fees, etc. The exemption from tax for Series EE bonds is decreased when the parent’s income exceeds certain levels.

An additional option is to invest in a 529 Plan (Qualified Tuition Program). Parents have two options with a 529 Plan. They can prepay their child’s tuition by buying tuition credits at today’s cost for future use or they can contribute to an investment account that is specifically set up for higher education. The contributions are not tax-deductible however they qualify for the annual gift tax exclusion of $14,000. In case your contribution is higher than the $14,000, parents may elect to treat the contribution as it was made over 5 years. Accumulated income grows tax-free until it is distributed from the account. Distribution proceeds used for qualified college expenses are exempt from tax, but if the distribution proceeds are used for other purposes, the withdrawal becomes taxable plus a 10% tax penalty on the amount of the withdrawal.

Lastly, Coverdell education savings accounts (Coverdell ESAs) may be the option you are looking for. Set up this account and have the ability to contribute up to $2,000 a year for your child under age 18 (age limitation is different children with disabilities). The contribution is not tax-deductible; the income earned by the account is not taxed and will be tax-free if used for qualified college expenses. If your child decides not to pursue a college education, the child has to claim the money by age 30, the earnings are taxable, and the earnings are subject to a federal tax penalty of 10%. The unused funds of an account owner who is over 30 can be transferred tax-free to a sibling’s Coverdell ESA account who is under the age of 30.

While in College – Paying

Thinking, “I am too late. My child is about to enroll in college and there are no funds set aside?” There are also ways to get tax savings from paying college expenses.

American Opportunity tax credit is a $2,500 tax credit per child for the first 4 years of their education. Qualified expenses include tuition, fees and books. 40% or $1,000 of this credit may be refundable.

For students that go on for secondary and graduate degrees the lifetime learning credit maybe available. The amount of this credit is limited to $2,000 per family and is calculated at the rate of 20% of expenses up to $10,000 in qualifying expenses.

These tax credits are designed to progressively decrease or even become wiped out when income exceeds certain levels. This may actually result in the credit not being available.

Scholarships should be the first choice to pay for a student’s education. This will reduce education costs since they are generally tax-free. The scholarship is taxable when it is considered compensation.

When employers pay an employee’s child’s tuition, the employee is usually taxed on the value of the payments. There is an exception to this rule, when focus of the education is different from the work of the employer, for tax purposes it is a scholarship and tax-free.

Gifting is an option before and after the student starts college. For example the student’s grandparents want to gift money to pay for their grandchild’s college costs. A single grandparent may give the student up to $14,000 without paying gift tax. Married grandparents may give the student up to $28,000 without paying gift tax. It must be noted that tuition directly paid to the educational institution falls under an unlimited gift tax exclusion.

Some parents consider having the student get a loan instead. As a general rule, interest from student loan is not deductible, however up to $2,500 in interest is deductible when the loan proceeds pay for higher education.

Parents and students can also opt to withdraw money from their retirement plans. Recipients of retirement plan funds are exempted from 10% penalty for premature distribution when the withdrawals pay for college costs. The withdrawal may be taxable depending on the type of retirement plan..

There are various ways to plan your child’s educational cost, but not all of the items discussed applies to all individuals and can be used at the same time. Uncertain as to what is the best option for you or you would like to know more of tax planning for your child’s future? This article is an example for purposes of illustration only and is intended as a general resource, not a recommendation.

Boon or Bane for Expat Students in UAE

Going abroad for higher education has long been the most cherished goal for students of under-developed and developing countries. But even students from well developed GCC countries like UAE (Dubai, Abu Dhabi, Sharjah) face educational challenges like preparing for high stake examinations like SAT/ TOEFL / GRE / ACT and many other. Indian migrants constitute a bulk part of population in United Arab Emirates likely over 4 million Indian migrants mostly from Kerala which is around 1 million and other south Indian states are estimated to be living in Dubai, Abu Dhabi, Sharjah region. Pupils of Indian migrants working over there in financial, automobile or petroleum industry faces a huge difficulty for higher education due to cultural difference based on traditional education style that the Indian parents dream for their pupil. Foreign students of Indian origin have to sit for high stake entrance exams to gain admission in engineering and medical colleges in India or Abroad like USA / UK / Singapore and many more. For aptitude test like SAT, the student need proper guidance and defined study plan with good study material to excel and secure a descent SAT Score Card.

While it is always better to search the internet and find out the exact procedure for applying for the entrance test but still NRI parents working over gulf region faces hurdles due to lack of genuine coaching facilities for JEE / NEET / SAT and counseling. It is always better to find out the total cost involved for NRI students in Indian colleges by taking into account the boarding, lodging cost, tuition fees for the course period and other expenses that come in the way.

Challenges faced by Indian migrants in UAE regarding coaching for JEE / AIIMS / SAT / NEET for their pupils:

• Lack of Proper Coaching Institution in UAE

• Lack of Indian style of education / coaching facility for high stake exams like IIT- JEE / BITSAT / AIIMS and many more.

• Issues of travelling due to distant location in the heart of desert seem hectic for students.

• Coaching Fees are much higher in comparison with Indian Coaching services.

• Non-availability of faculties from elite universities like Harvard, Stanford or IITs.

Higher Education in India is widely recognized and respected across the globe. Most of the Indian universities like IITs, NITs, and IIMs are represented in a much higher light compared to most of the universities of the world in terms of faculty as well as students. The Indian faculty in foreign universities is generally well respected for their teaching and research abilities. The Indian students abroad are rated at par for their caliber with the best students of the world. Besides, the Indian higher education has the comparative cost advantage over the other countries offering higher education of comparable quality.

The Importance of Learning Statistics

Statistics assignments are some of the most difficult types of work that students encounter at school. Today, even during elementary school statistics is introduced, but the level of statistics required to succeed at high school and college is much higher.

Statistics assignments often require help in the form of a tutor or other in order for the student to succeed and pass his or her class. This is because even the type of college-level statistics required for a humanities degree is often unfamiliar to the college student, who has encountered basic statistical ideas in high school but has never had to apply them in a concerted fashion, or at the high level that is required to emerge onto the working scene as a professional and climb the career ladder.

Statistics, actually, is a fundamental discipline for a wide variety of occupational areas which, even when failing to state stats or math as required skills, nevertheless will now and then present aspirants to high level jobs with tasks requiring them to apply statistics skills in order to achieve a desired outcome.

This reality demonstrates how important it is for all students to achieve a strong basic grounding in statistics because, even if they pass their stats classes in school, failing to be able to apply the statistical techniques learned in school could make them look bad at work or fail to gain a promotion if they are unable to do a statistical analysis or develop a report using statistics in a professional and skillful way.

Using Statistics Assignments as a Learning Tool

When students encounter statistics in high school and college, many of them just want to get through with their classes as quickly as possible and with the minimum knowledge necessary to pass, or, in the case of students with high standards, to maintain their desired GPA.

However, this is a misguided approach because statistics assignments are an opportunity for students to engage with the discipline, discover what they know and don’t know, apply the skills they are learning in class, and attempt to solve problems that require internalization of knowledge.

When students practice problems, the knowledge they develop is constructed from the inside through the relationship between applying theory to practice and technique.

It is well known that a desired learning outcome is achieved better the more types of stimuli are applied towards the same learning goal. In the case of statistics, the more the student is able to combine listening to lectures, observing the teacher solve problems on the board, and practicing applying those same techniques to problems presented on statistics assignments and homework, the more complete and permanent the knowledge and skills gained will be.

For students wishing to gain a strong hold of their stats, seeking statistics assignment help for homework and other practice opportunities further helps to deepen their knowledge and also helps them to retain it better. A statistics tutor or helper provides one more element of feedback to add to the student’s learning repertoire that can help to make information stick.

Putting it All Together

While we all know that we will confront statistics in school and college, even those of us who are sure we will never use it will benefit from seeking statistics assignment help from tutors or others who can guide us so that we can use these assignments as learning tools.

The more practice a student has, the easier applying the material they are required to know will be. When basic statistical knowledge and the ability to apply statistical techniques have been gained, a person will no longer view statistics and math as barriers that delimit the life paths they can and cannot pursue.

Statistics assignments provide a really excellent opportunity to internalize statistics knowledge and practice and make it permanent, which can only benefit the individual in the short and the long runs.

MOOCs: Where We’ve Been, Where We Are, and Where We’re Headed

Massive open online courses (MOOCs) have rocked the world of education probably faster than any other innovation in history. In just over a year, MOOCs have gone from being viewed as a panacea for all that ails education to being seen as an imposter: a cheapened form of education. Now the pendulum is swinging back to somewhere in the middle. Several pundits and observers have noted that MOOCs are following the Gartner hype cycle for emerging technologies, and most agree that we are now somewhere between the “trough of disillusionment” and the “slope of enlightenment,” on our way to the “plateau of productivity.”

As we move toward an environment where MOOCs are considered neither cure-alls nor curses, but rather tools that can be used in many different ways to improve education, it is useful to take a few steps back and examine where we’ve been and where we are so that we can make some reasonable predictions about where we’re going.

Cathy Sandeen of the American Council on Education colorfully described MOOCs in a recent Huffington Post article as having “splashed on the higher education scene in sensational fashion” when Coursera and Udacity launched in early 2012. But, as she notes, the history of MOOCs goes back to 2008, when George Siemens and Stephen Downes offered “Connectivism and Connective Knowledge” online for students at the University of Manitoba as well as for anyone else who was interested. The paying students at the university received credit for the course, and about 2000 additional students participated for free but not for credit. The theory behind this initial MOOC viewed knowledge as distributed and education as a process of building personal learning networks. Consequently, the course was based on open educational resources and peer learning.

It wasn’t until the big names, like Stanford, Harvard, and MIT, came on the scene that the hype cycle really started to accelerate. In the spring of 2012, both Coursera and Udacity opened their virtual doors, with edX following a few months later. The courses offered through these platforms were fundamentally different from the 2008 MOOC experiment, more closely mirroring the traditional classroom experience, with lectures, discussions, and tests that consisted mostly of multiple-choice questions. Because of the elite universities associated with the courses, students started to sign up by the thousands, then by the tens of thousands, and then by the millions. The huge response to these courses ignited a fire under the entire education community – many people praised MOOCs for their ability to offer unprecedented access to education at a low cost, while many others criticized them for unsound pedagogy and lack of student accountability. But students continued to sign up and universities continued to jump on the bandwagon.

MOOCs gained credibility when the American Council on Education recommended some for credit, and the California and Texas higher education systems started to look for ways to use MOOCs, especially for over-enrolled and remedial classes. By that time, it had become apparent that MOOCs were a force that could not be ignored and that they could be powerful tools for solving many problems facing education, including the exponentially rising cost.

Inevitably, there came some bad news, and MOOCs crested the “peak of inflated expectations,” starting a headlong dive into the “trough of disillusionment.” The bad news came from a couple of different fronts. First, although top universities were offering MOOCs, none were accepting them for credit. Also, the dropout rates were very high, with less than 10 percent of enrolled students actually completing their courses. In addition, many educators attacked the pedagogy of MOOCs, particularly those with no interactive component. To top it all off, San Jose State University recently put a partnership with Udacity on “pause” after initial results showed that students in the MOOC section of a class performed worse than students in the traditional section.

Predictably, there have been a few “I told you so’s,” and educators across the country are breathing sighs of relief that their jobs are not in imminent danger. But now, MOOCs are moving along the “slope of enlightenment” as we examine what works and what doesn’t in the current MOOC format and use these discoveries to improve education. For example, instructors in many settings are using the flipped classroom model and incorporating MOOC elements into blended learning programs.

So what does the future look like for MOOCs?

Due to their popularity as well as the massive resources that have been invested in them, it is safe to say that MOOCs are here to stay, at least for now. So the question becomes how we will use them. Joshua Kim of Dartmouth College suggested in a recent edSurge article that MOOCs will promote investment and innovation in education because they “focus attention on teaching.” MOOCs have changed how we look at teaching and learning – they have shifted the focus of education away from the transfer of knowledge and toward what students can do with that knowledge. This change is in line what has been framed as a shift from a knowledge economy to a creative economy. With information at our fingertips 24/7, the new focus is on critical thinking, problem-solving, judgment, and decision-making – which incidentally are also the workplace skills that are currently in the highest demand.

MOOCs and their elements are also starting to be incorporated into different areas of education, like corporate training, workplace skills training, and continuing and professional development. The goals of training programs are different than those for higher education – organizations’ main focus is performance outcomes that result directly from employee training. For these programs, MOOCs have the potential to deliver the necessary training effectively and at huge cost savings. In fact, some writers have suggested that the early MOOCs were barking up the wrong tree – the ideal target audience for these courses is not Stanford students or leisure learners; it is workers who need to acquire new skills and competencies to upgrade their skills and perform better in their jobs. Several MOOCs are already aimed at this audience, such as Coursera’s continuing education programs for teachers and Aquent’s recently opened Gymnasium, which offers coding courses for creative professionals.

As MOOCs move toward the “plateau of productivity,” the focus will shift from whether or not they should be used to finding the best ways to use them. New tools and technologies will become available, new audiences will be engaged, and new innovations will improve the learning experience for everyone involved. Only then will MOOCs live up to their promise of disrupting and transforming education.

How to Increase Education Percentage in India

India is a country which has though adopted the Right to Education Act and has made a mention of this right in Article 21A of the Indian Constitution; even then India has strived to achieve a literacy rate of only 74-75 percent. This figure may seem huge, but the simple criteria to certify a person as literate along with the advancing world is referred; the figure seems to be a small one only.

To determine the literacy rate along with the percent of educated people we need to discuss upon various heads of education in India. Here we will discuss some topics to increase Education Percentage in India.

Primary Education

The opening up of the Anganwadi centers and the Indian government schools at each and every city and village has brought most of the children to school. Moreover, the appropriate governments also provide the students with various perks like free education, meals, books and uniform. This is the level of education where most of the students are enrolled and it is going up.

Secondary Education

This is the level where the drop out from school begins. The reason being, the poor conditions of the family. Not in all States, the education till the secondary level is free. The poor send their sons to work and get their daughters married after they complete their primary education. Scholarship schemes can help benefit this level of education.

Higher Education

This is the level of education where most of the students tend not to opt for. The reason being the high fees. It is very much evident that top class government colleges like IIT, NLU, AIIMS, IIM, NIFT are all high prices and private institutions charge double and more. Due to this reason, most the population which is either poor, or constitutes of the lower middle class doesn’t send their children for higher education. They prefer sending their children for jobs. The Central and the State universities charge less but still the poor household cannot afford the same. In this regard, the various scholarship schemes have played a very important role and so has reservation.

Adult Education

This is one of the trends mostly observed in the rural areas. The reason being, the population is unaware of the perks of being literate. In rural areas, night schools are operated by NGOs where the farmers who are not literate and also, the population who is senior is change are taught free of cost. This type of schooling is becoming popular and is bearing fruitful results.

Gender Literacy

The gender literacy is a big issue for the country to tackle. If we rely on the stats, then we can see that 82 percent of the males are literate as compared to 65 percent of females. A huge gap of 17 percent still lies. Though the 2011 census figures are better than the previous ones. It is only due to the different schemes introduced by the various State Governments with the support of the Central government. Schemes like Cycle Yojana, Uniform, Free meals and most importantly, free education have attracted most of the female students in the nation to schools. The poor parents are now sending their daughters to school.

Education is very much important to survive in the globalized world of today. It is most of the times seen that the poor people are the ones who remain literate and so do their children. This is one of the reasons due to which they are victimized. But, the efforts of the governments at the different levels have helped increase the literacy rate in the recent years and are continuing to do the same.