FAQ’s2017-05-27T16:01:04+00:00

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Frequently Asked Questions (FAQ’s)

What is a 529 Plan?

A 529 Plan is a savings plan designed to help families save for college.  Because you can invest your savings and your money grows tax free, it is a better way to save than a traditional bank account.  Families own and control all of the savings in their 529 Plans.  If your child does not go to college or there are excess funds after college, the remaining money can be withdrawn (usually there is a penalty if withdrawn for reasons other than college) or transferred to another family member.

What is the C4C Scholarship Fund?

The Scholarship Fund includes money raised through community fundraisers, C4C and others.   When your student is ready for college, each qualifying student receives a scholarship equal to the balance in your 529 Plan with adjustments based on the number of years you were in a C4C group, financial need, and the amount in Scholarship Fund.

Why should I start saving early for college?

First, the earlier you start the more you will have when it is time to go to college.  A family saving $20 a month starting in Kindergarten will save $3,120 while a family starting in high school will only have $960 when their child is ready for college.

Second, starting early allows the savings you invest more time to grow.

Why should I invest my college savings?

Currently, savings accounts earn less than 1% interest a year.  Intelligently invested money can earn much more.  If you save $20 a month starting in kindergarten you will have $3,120 by the time your child is ready for college.  If these same savings are invested and investment returns average 7.5% a year, you will have $2,138 more.

Is investing my college savings risky?

Yes.  Having said that, on average it is usually much more profitable than putting your money under your mattress or in a savings account.

A savings account typically earns less than 1% interest every year.  Historical annual average return for Vanguard’s S&P 500 index fund is 10.4% for the period between 1928 – 2010.  If you averaged 10% a year, you would double your savings every seven years.

Still, most every investment advisor cautions investors that “past performance is not indicative of future results”.   While this is true, if you start early, you are more likely to meet historical averages because the ups and downs of the stock market have more time to balance out.

Finally, while C4C will invest the Scholarship Fund in an aggressive way, families get to decide how they invest their 529 Plans.

How will the C4C Scholarship Fund be invested?

C4C’s current plan is to invest the Scholarship Fund in an S&P 500 Index Fund.

How much of a C4C Scholarship can I expect?

C4C Scholarships are equal to the balance of a students 529 Plan with adjustments based on the number of years in a C4C group, financial need, and the amount in the Scholarship Fund.

How can C4C promise that 100% of donations will help a student with financial need pay for college?

Individuals who donate to charity want to know that their money is reaching the people who need the money.  To fulfill the promise, all of C4C’s operating costs will be paid by the founder, board members, or volunteers.

How can my child save for college with communities4college?

To qualify for a college grant through C4C, students must:

  • Be a member of a C4C sponsored group
  • Attend an accredited two or four year college
  • Have a demonstrated financial need
  • Open a 529 Plan

Can my child still benefit if I don’t earn enough to save for college?

Yes.  If you participate, C4C will help you start a 529 Plan with $50.   When your child is ready to attend college, C4C provides a scholarship equal to the balance in your 529 Plan with adjustments based on the number of years you were in a C4C group, financial need, and the amount in Scholarship Fund.

Can my child still benefit, if I don’t have time to participate in fundraising for the Scholarship Fund?

Yes.  If you participate, C4C will help you start a 529 Plan with $50.   When your child is ready to attend college, C4C provides a scholarship equal to the balance in your 529 Plan with adjustments based on the number of years you were in a C4C group, financial need, and the amount in Scholarship Fund.

How do you determine if my child has a financial need?

Financial need is determined by taking the cost of attending your college for one year minus scholarships, grants, work-study aid, and EFC.  As of this writing, over 75% of families would qualify for a portion of the Scholarship Fund if their child was attending a four-year college.