Get Smart Money Answers Through Sallie Mae’s Chat Thursday Night, Jan. 27, 9-10 P.M. EST

(BUSINESS WIRE)--Saving for college and don’t know where to start? Looking to improve your credit score? Juggling multiple financial goals? Join Sallie Mae’s live chat to pose these and other questions to financial experts from the Financial Planning Association® (FPA®) on Thursday night, Jan. 27, from 9 to 10 p.m. EST.

“Whatever your life situation, this is a great opportunity to connect with financial planning experts who can provide relevant assistance and information.”

The free chat, which is open to the public through Sallie Mae’s Facebook page, will feature two expert practitioners with a combined 30 years experience in helping people make smart money decisions. Ken Robinson, CFP®, senior planner at the Monitor Group, Inc., in McLean, Va., is active in pro bono financial planning efforts and Junior Achievement financial literacy programs for local schools. Catherine Seeber, CFP®, principal financial advisor for Wescott Financial Advisory Group, LLC in Philadelphia, leads area FPA members in their efforts to teach financial literacy in the community.

“The beginning of a new year is always a good time to re-examine financial goals,” says Marty Kurtz, CFP®, AIFA®, 2011 president of the nonprofit Financial Planning Association. “Whatever your life situation, this is a great opportunity to connect with financial planning experts who can provide relevant assistance and information.”

To participate in the chat on Thursday night or submit a question in advance, visit www.Facebook.com/SallieMae.

To learn more about Sallie Mae’s smart money tips for 2011, including resources to make completing the FAFSA financial aid application easier, visit www.SallieMae.com/SmartMoney2011. Sallie Mae also invites you to share your smart money tips—between now and Jan. 30—for a chance to win a Samsung 40-inch 3D TV through its Smart Money Tips Giveaway.

Note: Smart Money Tips giveaway requires no purchase. Void where prohibited. For a complete set of sweepstakes rules, visit www.SallieMae.com/SmartMoney2011.

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Sallie Mae Encourages Parents to Make a Commitment to Save for College During September’s National College Savings Month

(BUSINESS WIRE)--Parents overwhelmingly agree that a college degree is more important now than ever, yet few have a plan on how to pay for it, according to research conducted by Sallie Mae and Gallup. Sallie Mae, the nation’s saving, planning and paying for education company, encourages parents to make a commitment to save for college and recommends several tips to meet the challenge.

“Parents, have a choice – pay interest on college loans, or potentially earn it on college savings”

“Parents, have a choice – pay interest on college loans, or potentially earn it on college savings,” said Albert L. Lord, CEO. “We want to help families of all income levels save responsibly. Even saving little by little now can make a big difference by the time the college tuition bill is due.”

As children head back to school, Sallie Mae urges parents to use these tips and tools to get back to saving for their child’s college education during September’s National College Savings Month.

· Build a plan. First, understand the full cost of college and build a plan to save for it. Sallie Mae’s free Education Investment Planner helps calculate future college costs and an age-based estimate how much to save. Families can create a savings goal and set up automatic deposits of $25 or more each month or deposit money annually as budgets allows.

· Saving isn’t taxing when you use a 529 college savings plan. 529 college savings plans are tax-advantaged ways to save for college. Most 529 plans are sponsored by a state and many offer a state tax incentive or other benefits to residents. Family members can enroll in any 529 plan, regardless of the state of residence, and the account is easily transferrable to another beneficiary who is a family member (as defined in federal tax code) without taxes or penalties. Earnings grow free of federal income taxes as long as withdrawals are used for qualified education expenses, and many states offer residents a tax break or matching grants for investments made.*

Contributions to a 529 can be up to $13,000 for a single person or $26,000 for a married couple filing jointly in a single year without incurring a gift tax. An individual can also make a five year contribution at one time for $65,000 if single or $130,000 if married and filing jointly to a 529 plan account beneficiary without incurring gift taxes in most circumstances.

· Get by with a little help from your (family and) friends. Grandparents, aunts, uncles and friends can open a 529 college savings plan on behalf of a future student or, in most circumstances, contribute directly to an existing 529 account. Upromise Investments account holders can easily encourage family members and friends to contribute a gift of college savings through Ugift. Since 2008, more than $12 million has been gifted using Ugift.

· Put your employer to work. Check your benefits at work as many companies offer employees the ability to contribute to a 529 plan through ongoing payroll deduction. If not, talk to them about providing company-wide education and a benefit to help employees contribute to a 529 plan through payroll deduction.

· Bank on it: Most parents save for college using two to three savings vehicles. FDIC-insured high-interest savings accounts and Certificate of Deposit accounts from Sallie Mae are low-risk investment options with competitive interest rates, no monthly fees and no minimums. In addition, the High-Yield savings accounts offer the ability to earn extra Upromise rewards to bolster your savings.

· Saving is rewarding with Sallie Mae’s Upromise: Earn extra money for college through Upromise. Joining Upromise is free and rewards members for eligible everyday spending with hundreds of participating merchants or making purchases with the Upromise World MasterCard. During the month of September, more than 200 online participating merchants such as Gap.com, HomeDepot.com and Sears.com will increase contributions. Earnings can be invested in certain tax-deferred 529 plans, deposited in a high-yield savings account, used to pay down an eligible student loan; or simply used for college or other expenses. Even friends and family can sign up to help.

· Kids’ contributions are meaningful: Kids as young as school-aged can contribute to their future by setting aside money from a weekly allowance for college. For older kids, suggest depositing money earned baby-sitting, from summer jobs or working part-time into their college savings account. Not only will it add up over time, but also will it be a weekly reminder of the child’s goal to attend college and teach an important lesson on saving.

*Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.

When you invest in a 529 college savings plan you are purchasing municipal securities whose value will vary with market conditions. Investment returns are not FDIC insured, and carry no bank guarantee, and you could lose money by investing in a 529 college savings plan.

For more information about 529 college savings plans managed or administered by Upromise Investments, Inc. call 1.877.529.2980. Investment objectives, risks, charges, expenses, and other important information are included in a 529 college savings plan's offering statement; read and consider it carefully before investing.

Before investing in any 529 plan, you should consider whether your or the designated beneficiary's home state offers a 529 plan that provides its taxpayers with state tax and other benefits that are only available through the home state's 529 plan.

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Sallie Mae Announces New Market-Leading Savings Account Interest Rates

(BUSINESS WIRE)--Whether you are saving money for college or other important goals, Sallie Mae now helps you achieve your goals with increased savings account interest rates among the highest nationwide. Saving for college is increasingly a priority for parents with 59 percent currently saving for college through a combination of savings, CDs and money market accounts according to national research from Sallie Mae and Gallup. Of these parents, 38 percent manually deposit funds when budget allows and 31 percent are habitual savers.

“The account was no trouble to open and the high rate combined with Upromise benefits will help us build our savings.”

“The Sallie Mae savings account earns more interest and helps our family save for college, for us it was a no brainer,” said Julie M., a mother of four from Cincinnati. “The account was no trouble to open and the high rate combined with Upromise benefits will help us build our savings.”

The High-Yield Savings Account by Sallie Mae is now offering a 1.4% Annual Percentage Yield (APY), among the best interest rates in the nation. There are no minimum balance requirements, no monthly fees, accounts are FDIC insured and starting an account takes just a few minutes online. Customers can save even more with a 10 percent annual match of their Upromise rewards earnings. Sallie Mae’s Upromise rewards program is free, and members earn rewards through everyday spending at online retailers, restaurants, gas stations and grocery stores.

High-Yield Savings Accounts are just one of the ways you can save with Sallie Mae. The company also offers Certificates of Deposit accounts and college savings plans. Certificate of Deposit accounts have no minimum balance, no monthly fees and terms of 12 months at an increased rate of 1.55% APY, 36 months increased to 2.40% APY or 60 months at 3.0% APY. Tax-advantaged 529 savings plans are available from Sallie Mae’s Upromise Investments. The High-Yield Savings Account and Certificates of Deposit by Sallie Mae are products of Sallie Mae Bank, member FDIC.

Sallie Mae recommends students follow a “1-2-3 approach” to paying for college: first, use free money by filling out the FAFSA to access need-based grants and research and apply for scholarships, supplemented with current income and savings, such as the High-Yield Savings Account, Certificates of Deposit and 529 plans by Sallie Mae. Second, explore federal loans. Third, fill any gap by using a pay-interest-as-you-go private education loan. For example, Sallie Mae’s Smart Option Student Loan helps reduce the total finance charges paid over the life of the loan and helps you pay off sooner.

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What is "IRS section 529"?

IRS section 529 or Qualified Tuition Programs (QTP's) are found under Title 26, Subtitle A, Chapter 1, Subchapter F, Part VIII, Section 529 of the Internal Revenue Code or "IRC". It is considered the most complicated and hard to read section of the Code and a good treatment for insomnia. This section deals with special tax breaks for families, hence the "insomnia effect".

Parents who desire to overcome the skyrocketing tuition costs can utilize IRS section 529 to start saving early for their children's school expenses. Parents have a direct control over how and where their money is being invested. Under the college savings plans investors are not subject to any minimum income restrictions or area-specification where savings plans are concerned.

The Plan does not restrict participation eligibility; anyone can participate regardless of income. Participants name the beneficiary of the account and he will be the one using the money for educational expenses. The owner of the account can change the beneficiary at any time and maintain control of the account for the purpose of determining assets for the expected family contribution for college expenses.

Participants can contribute up to $13,000 per person for each beneficiary they have without having to pay a federal gift tax. Married participants can contribute a total of $26,000 per beneficiary. Participants can contribute up to $335,000 per account. The value of the account may rise above this amount because of increases in the investments but once this amount is reached or surpassed participants can no longer contribute to it.

One of the benefits that attract families to the 529 plan is the friendly tax treatment it offers. Funds withdrawn for educational expenses are not subject to Federal tax and some states allow the participant/investor to deduct the contributed amount from state tax.

Generally speaking there are two types of 529 plans -Prepaid plans and Savings plans. A Prepaid Plan is effective when one wishes to buy tuition credit at the present rate to be used later and the Savings Plan is dependent solely upon the market performance of principal investments. Most 529 savings plans offer age-based asset allocation choices where the underlying investments become more conservative as the recipient approaches the college-going age.

I can go on and on about the pros and cons of the 529 Plan but I would like to shift gears here and look at the 529 Plan treatment in a bankruptcy proceedings.

A 529 college-savings plan assets are not exempt under bankruptcy law if it is held for less than one year. The law exempts 529 assets held for at least two years. If assets are held between one to two years the exemption is limited to $5,000.00. In other words, individuals who participate in 529 Plans and find themselves in need for bankruptcy protection should look carefully at how long their 529 Plans have been in effect before deciding to file.

Article provided by George R. Belche, Attorney at Law, LLC

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Sallie Mae and Gallup Research Reveals Families of All Incomes Are Saving For College Yet Most Fall Short of Goals

(BUSINESS WIRE)--Families of low and modest incomes who are saving for college save as much or more as a percentage of income as families in higher income brackets, says a new study released today from Sallie Mae and Gallup. On average, parents who save for college earmark 3.6 percent of annual income for their child’s education, while households earning under $50,000 set aside 7.5 percent of their annual income. Based on a nationally representative survey of more than 1,200 parents of children under age 18, “How America Saves for College” identified savings habits and motivators to encourage more families to save.

However, only 29 percent of families are on track to reach their savings goal. The study estimates that parents would need to save an average of 5.7 percent of income annually to meet their self-defined goal by the time their child goes to college.

“The urgency of addressing college affordability has never been felt so strongly across the full spectrum of American families,” said Indiana Treasurer Richard Mourdock. “We are fast approaching an era in which our retirees will be better educated than our workforce—backwards momentum that we must reverse in order to reclaim our leadership position on the world stage. These survey numbers suggest that saving for higher education has become a high priority for the nation, and we should encourage that commitment by providing creative solutions and support for families of all income levels.”

Among the study’s additional findings:

* Parents of children 12 and under are more likely than parents of teens to have saved. On average, parents began saving when their oldest child was almost three years old.
* Families saved an average of $2,676 for college annually, for an average total of $13,827.
* Parents cited employer matching as the top motivator (66%) that would encourage them to save for college, followed by tax benefits (44%). In addition, 25 percent indicated that a shopping rewards program would motivate them to save for college.
* 529 college savings plans are gaining popularity, particularly among families with younger children. While the overall 529 usage rate for savers was 33 percent, parents with children under age seven are twice as likely to turn to 529 plans (43%) as parents of teens (20%).
* Regardless of the parents’ income level or child’s age when parents began saving, the total amount saved increases steadily the longer that dedicated savings vehicles are used. Parents of any income level who had saved seven years or more accumulated two to three times the savings as parents in corresponding income levels who saved for shorter periods of time.
* Families in the Northeast have saved the most with an average savings of $15,846 closely followed by the West with $15,589. The South has an average savings of $13,722 and the Midwest has the lowest with an average of $9,693.

“President Obama has set a goal of achieving the highest proportion of students graduating from college in the world by 2020,” said Albert L. Lord, vice chairman and CEO, Sallie Mae, the nation’s leading saving, planning, and paying for education company. “Students spend 12 years preparing academically, but too many families overlook the need to prepare financially. Even a little bit of savings set aside regularly over time can go a long way toward opening the doors to a college education.”

Sallie Mae helps families plan, save, and pay for college through its Upromise program, which has helped families earn $500 million in college savings rewards, and by administering 529 college savings plans, which offer tax-advantaged ways to save. To help families develop a saving for college plan, Sallie Mae also offers its free online tool, Education Investment Planner (www.SallieMae.com/invest), which enables families to project the total cost of college factoring in the child’s age, type of institution, and the historical rate of increase in tuition.

“How America Saves for College” is part of a series conducted by Sallie Mae and Gallup on how families save and pay for college, and the full report is available at www.SallieMae.com/howAmericasaves.

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Make Holiday Gift-Giving Easy This Year By Contributing to the Path2College 529 Savings Plan for Your Loved Ones

(BUSINESS WIRE)--Are you looking for the perfect holiday gift this year? Something that is simple and that you can get without even leaving the comfort of your home, yet a gift that is meaningful and lasts a lifetime? Then what better way to make a long-lasting difference for your child or grandchild than opening or contributing to the Path2College 529 Savings Plan for your holiday gift this year.

“The gift of a college education is priceless, it lasts a lifetime, and every penny saved today can make an impact in your loved one’s financial future,” said Chuck Penuel, Director of the Path2College 529 Plan. “Research by the College Board says that an individual with a four-year college degree will earn approximately $1 million more than a high-school graduate over the course of a lifetime. That means saving for college today could be one of the best holiday shopping decisions you can make to help a young person you love.”

Penuel said that one of the easiest ways to help save early for the future costs of college tuition and other qualified expenses, such as certain room and board and books and fees, for colleges in Georgia and nationwide, is through the Path2College 529 Plan. The plan, which is offered by the State of Georgia and managed by TIAA-CREF, offers seven investment options, low annual asset-based fees, and no sign-up, maintenance or third-party sales fees. Any earnings in the Path2College 529 Plan are federal income tax-exempt, and withdrawals for these qualified expenses are also tax free.

“The Path2College 529 Plan is easy to use and understand, and it makes gift-giving this holiday season simple,” said Penuel. “It is easy to contribute to an existing account or to open a new account. And with the experience of TIAA-CREF, and a program that has almost 100,000 accounts and over a half billion in assets, Georgia families can feel more secure in choosing the Path2College 529 Plan for their college savings.”

At www.path2college529.com, anyone can start an account for a beneficiary or contribute to a loved one’s account by printing a personalized gift certificate to present to the recipient. Simply go to the Web site, and click on Print a Gift of Education Certificate. Print and fill in the Certificate and then give your contribution and the Certificate to your loved one. Or, call (877) 424-4377 and one of our college savings specialists will assist you. An account can be started or contributed to in amounts as small as $25.

Once an account is established, additional contributions can be made to the account through check or electronic funds transfer. You may contribute as little as $25 per investment option, and you can establish convenient monthly, semi-monthly or quarterly contributions all year-round from your checking or savings account.

“There are numerous benefits to 529 plans,” said Penuel. “If a financial emergency occurs, you can take the money out of the account, with some penalties of course. Your non-qualified withdrawal is subject to federal income taxes as well as an additional 10% federal tax, but it is still accessible if it’s needed. A Path2College 529 Plan account is also transferable, so if your child decides not to attend college, you can transfer it to another eligible member of the family. It’s an excellent program to help your loved one get on the right path. And as the account owner, the parent retains control of the account.”

For more information on the Path2College 529 Plan, visit: www.path2college529.com or call (877) 424-4377.

Consider the investment objectives, risks, charges and expenses before investing in the Path2College 529 Plan. Please visit www.path2college529.com for a Disclosure Booklet containing this and other information. Read it carefully.

Before investing in a 529 plan, you should consider whether the state you or your Beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state’s 529 plan.

We are required to notify you that the tax information contained herein is not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties. It was written to support the promotion of the Path2College 529 Plan. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.

Account value for the Investment Options is not guaranteed and will fluctuate based upon a number of factors, including general market conditions.

© 2008 TIAA-CREF Tuition Financing, Inc., program manager. TIAA-CREF Individual & Institutional Services, LLC, member FINRA, distributes the Path2College 529 Plan.

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Keep Your Money in Your Pocket: November is National Scholarship Month and the Ideal Time to Plan How to Pay for College

(BUSINESS WIRE)--As economic reports signal a national recession and consumers look to cut back on spending, scholarships are an ever-more important way to pay for college. Unlike other forms of financial aid, scholarships do not have to be repaid. November is National Scholarship Month and the ideal time for students to research the college scholarships that meet their needs.

Sallie Mae’s recent study on How America Pays for College, conducted by Gallup, found that 17 percent of students used scholarships to pay for college last year and that the average family covered 15 percent of the cost of college using a combination of grants and scholarships.

Scholarship awards range from a few dollars to a full tuition bill and are offered by private sources, such as The Sallie Mae Fund, in addition to federal and state governments. Students and parents can quickly identify the scholarships they may be eligible for by using Sallie Mae’s free online Scholarship Search, which includes information about more than 2.9 million scholarships worth more than $16 billion in scholarship dollars. The Scholarship Search is available at www.SallieMae.com/scholarships and through a new “widget” that allows any organization -- including high schools, colleges and other community organizations -- to easily make the free tool accessible on the organization’s own Web site. Organizations can visit www.SallieMae.com/widget and simply copy and paste the code into any page on their own Web site.

Families can see the value of scholarship contributions by using Sallie Mae’s Education Investment Planner (www.SallieMae.com/plan) to customize their own pay-for-college plan. Using the Planner, families may estimate the total cost of a college degree, build a plan to pay for college, and estimate the salary a graduate would need to keep repayment of student loans manageable. Sallie Mae’s Education Investment Planner helps families understand the total cost of college and how to pay for it without going beyond their means.

“In tough economic times like these, now is not the time to overpay for anything, particularly college,” said Martha Holler, spokeswoman, Sallie Mae. “With a little bit of extra effort, students will find that scholarships can help them keep more of their money in their own pocket.”

Scholarships are a key part of Sallie Mae’s 1-2-3 approach to paying for college: first, use free money by filling out the FAFSA to access need-based grants, research and apply for scholarships, and supplement with current income, college savings, and an interest-free monthly tuition payment plan. Second, explore federal loans, which offer fixed interest rates and flexible repayment options for students and parents. Third, consider covering any remaining unmet need with private education loans.

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