Last year, Fidelity Investments did a study called the College Savings Indicator to measure how families deal with college costs.

They found that 26 percent of parents will pay for all college costs, four percent will not pay for any college costs and the remaining 70 percent plan on paying a portion of college costs.  In short, college is still a high priority.

On average, these families expect to pay 62 percent of the cost of college and students will rely on grants, scholarships, student loans, their own savings, gifts from grandparents and money from part-time jobs during college to make up the difference.

Some of those options are better than others: a full 81 percent of parents surveyed didn’t want to burden their children with a lot of student debt (I suspect the other 19 percent don’t ‘want to burden their children’ either, but see it as a reality).

Fidelity reports that 64 percent of families have started saving for college, although only half of those are using a 529 plan.

The 529 college savings plan is a terrific way to save for college for a variety of reasons.

• While the contributions are not federally tax-deductible like an IRA, the growth in the account is tax-free at both the state and Federal level.  Initially, the savings was simply tax-deferred, but in 2007, the law was changed to make qualified withdrawals tax-free permanently.
• Most states (including Missouri) offer the additional benefit of a tax-deduction on state taxes, although it is generally limited.  For example, in Missouri, contributions are deductible up to $8,000 per individual and $16,000 for married couples filing jointly.
• You, the donor, stay in the driver’s seat.  If you set up a Uniform Transfer to Minor Act (UTMA) account, the kid has full control at age 18 to pay for college or get a new sports car.  In the 529 account, the beneficiary has no rights to the funds.  You get to decide the timing, size and purpose of the withdrawals.
• If you intended the money for one child and they don’t go to college, you can just pass the money along to another child in the family.  If that doesn’t work, you can reclaim the money, although then you will have to pay back-taxes on the earnings and may be subject to a penalty.
• In general, 529 accounts are flexible, low maintenance and have low costs.  There are exceptions of course and you have to be careful, but there are good choices available to savers.

It’s always a good time to start an account for your child or grandchild, or contribute a little more if you’ve already started an account.

Now, I also have some advice that you can pass along to your kids or grandkids – don’t do something stupid in your senior year!

While it’s somewhat uncommon, about 20 percent of colleges have revoked an admission offer.  This happened to someone in my sister’s class, and it involved a bunch of Ivy League schools.  As I remember it, he wrote an acrostic poem (where the first letter in each line spells a word or message) in the school paper that was profane.

It was bad enough then, but it’s worse now because kids are making these mistakes online.  I saw a study that said that one-third of colleges would revoke an admission based on an ‘inappropriate website posting.’

The internet is a mine field for kids and young people – tell your kids and grandkids not to do anything online that they wouldn’t be perfectly happy to see on the front page of a newspaper (and hope that they don’t ask, ‘what’s a newspaper?’).