Should I convert to VA prepaid?

[Anonymous]

I've been saving since the kids were little in their 529s. We're in the College America plan for VA.

DD is in 8th grade. Turns out we're about $2,000 short of being able to prepay for 8 semesters in Virginia thanks to savings and appreciation.

I'm trying to decide whether to hedge future risk by going ahead and locking this in. I'd have to continue to save for room & board, and I realize we'd have to cover any difference between in-state tuition and out-of-state or private.

As it is, I'm kind of worried about the market correcting in the coming months and not recovering before DD goes to college (I don't have a lot of faith in Trump's ability to actually bring about tax reform, and I think the promise of that is largely what's driving the market right now). That said, seems to me like thinking there would be no recovery in 5 years is a bit crazy.

So, what do you think? Take the sure thing or let it ride and hope for further compounding?

[Anonymous]

Hi. I can't say a word about the market besides it has me spooked, too. I don't know a damn thing about your finances, so maybe that meandps my experience is useless, but here goes.

The Virginia schools are quite good, but there are other good schools in America that might be a better fit for your kid.

* My kid Isn't a shoe-in for UVA but can probably get into a state flagship with an equally good reputation elsewhere. We are willing to pay for it.

* my kid wants to be an engineer, can do better than VCU, but doesn't want to be in the boon docks far from everything.

*UVA. engineering is a side thing at that school. Sure, the kids are bright, but it is really a major at a more traditional college, rather than a major within a stem school or a school of engineering. For some kids, this is perfect, for others a disappointment. Plus, he finds frats repulsive.

Do you know who your kid will be? Do you really think you can afford out of state?

[Anonymous]

OP-- I am risk adverse and not a financial whiz. But, after the election, I moved my 8th grader into a prepaid 529. I'm betting pell grants get cut and that public tuition costs rise faster than a 529 return. And that there is a real chance of Trump's policies tanking the economy. For me, locking in tuition now and knowing for sure that college was paid for no matter what was more important than a possibly higher ROI. So, I may kick myself if the stock market keeps climbing. But, I feel like there is a lot of uncertainty right now. At I can sleep well at night.

[Anonymous]

No. Keep the flexibility

[Anonymous]

One option is to do a part conversion, say 50%. Then you are safe on 50% but also can get possible appreciation on the rest. But it essentially boils down to your risk tolerance, both psychologically and financially.

[Anonymous]

You could do pre-paid but also save in a separate 529 for expenses other than tuition and fees which will be covered by the pre-paid for in state costs.

[Anonymous]

Anonymous wrote:I've been saving since the kids were little in their 529s. We're in the College America plan for VA.

DD is in 8th grade. Turns out we're about $2,000 short of being able to prepay for 8 semesters in Virginia thanks to savings and appreciation.

I'm trying to decide whether to hedge future risk by going ahead and locking this in. I'd have to continue to save for room & board, and I realize we'd have to cover any difference between in-state tuition and out-of-state or private.

As it is, I'm kind of worried about the market correcting in the coming months and not recovering before DD goes to college (I don't have a lot of faith in Trump's ability to actually bring about tax reform, and I think the promise of that is largely what's driving the market right now). That said, seems to me like thinking there would be no recovery in 5 years is a bit crazy.

So, what do you think? Take the sure thing or let it ride and hope for further compounding?

I don't think it's that simple. They don't just give you the in-state value, they give you some rate Of return on the amount you paid, which is generally less than what you would have earned in a VEST account. My understanding is that the pre-paid is a great Deal if you go in-state but not at all a good deal if you don't. Of course you still get the tax advantages.

If your daughter is in 8th grade,, you are probably starting to have some sense of what type of student she is, wha her interests are, etc. if I'm-state seems like a good fit, or you're really committed to her going in-state then do prepaid. If you're all about keeping options open, then I wouldn't.

[Anonymous]

Anonymous wrote:Hi. I can't say a word about the market besides it has me spooked, too. I don't know a damn thing about your finances, so maybe that meandps my experience is useless, but here goes.

The Virginia schools are quite good, but there are other good schools in America that might be a better fit for your kid.

* My kid Isn't a shoe-in for UVA but can probably get into a state flagship with an equally good reputation elsewhere. We are willing to pay for it.

* my kid wants to be an engineer, can do better than VCU, but doesn't want to be in the boon docks far from everything.

*UVA. engineering is a side thing at that school. Sure, the kids are bright, but it is really a major at a more traditional college, rather than a major within a stem school or a school of engineering. For some kids, this is perfect, for others a disappointment. Plus, he finds frats repulsive.

Do you know who your kid will be? Do you really think you can afford out of state?

Why the odd rant about UVA. We get it--it won't be an option.