529 Plan Alternatives: UMGA, Roth IRA, And More

Want to gain control of your cash? Then you probably need to learn how to create a budget. A budget is still the best tool to help you control your spending and achieve your financial goals.But getting started with budgeting can feel intimidating. Between your bills, subscriptions, and in-person purchases, how in the world do you go about tracking all your expenses throughout the month? Learning how to create a budget may seem like more work than it’s worth.But don’t give up on budgeting before you even start. With the right strategy and budgeting tools, building a budget may be a lot easier than you think. In this guide, we give step-by-step instructions on how to create a budget that actually works.

The 529 plan was designed specifically for education savings, offering tax-free growth and tax-free withdrawals for qualified education expenses. Many states also provide tax deductions or credits for contributions.Despite these advantages, some families hesitate to commit. Concerns about what happens if a child does not attend college, limitations on investment choices, or uncertainty about future expenses push some parents to explore other options.Alternatives such as UGMA/UTMA custodial accounts, Roth IRAs, or savings bonds can provide more flexibility. However, each comes with tradeoffs that influence financial aid eligibility, tax treatment, and long-term wealth planning.Here are the main 529 plan alternatives, along with the pros and cons of each.

529 plans were originally created to help families save for higher education with the benefit of tax-free growth. Over the years that definition has expanded, but it still calls into question: what happens when you're done with education and have an unused balance?Reasons range from children receiving scholarships, choosing lower-cost schools, finishing degrees early, or even deciding not to attend college at all.While funds in a 529 plan don’t expire, spending them on non-education costs generally triggers taxes and a 10% penalty on the earnings portion. Some states may levy a penalty as well! The good news is that families now have more ways than ever to use extra funds without losing the tax advantages.

For months, income-driven repayment processing has been a source of frustration for student loan borrowers. In August, the Department of Education reported (PDF File) that it processed 305,641 IDR applications. That figure marks one of the best months since courts required public updates earlier this year.The backlog now stands at 1,076,266, down significantly from nearly 2 million in the spring. For borrowers, this means faster processing of applications that determine monthly payment amounts and eligibility for long-term student loan forgiveness.PSLF buyback processing also saw it's best month yet, with 5,400 PSLF buyback requests processed. However, the backlog of buyback requests still grew, highlighting that progress on this front is slow.The improved processing signals that the Department may be allocating more resources to address longstanding delays. Still, over a million cases remain undecided, and how quickly the agency can sustain this pace remains a pressing question, especially as new repayment programs such as the Repayment Assistance Plan (RAP) are set to launch in 2026.

The American Federation of Teachers, representing 1.8 million members, has intensified its legal challenge against the Department of Education and Education Secretary Linda McMahon. In an amended complaint filed this week (PDF File), the union seeks class action status on behalf of millions of borrowers it argues are unlawfully being denied access to income-driven repayment (IDR) programs and Public Service Loan Forgiveness (PSLF).The filing follows a timeline in which the Department froze processing of IDR applications for months, leaving a backlog that started at two million borrowers, but still is blocking more than one million borrowers. The AFT argues that even as processing resumed, the Department has effectively blocked forgiveness by halting loan forgiveness under IDR plans and allowing a separate PSLF Buyback backlog to climb above 74,000 applications.The complaint alleges these delays and denials violate federal statutes that require the government to offer affordable repayment options and cancel loans after 20 or 25 years of repayment, or after ten years of public service. The union is pressing the court to enforce these obligations before the end of the year, when the student loan tax bomb resumes.

For high school seniors looking to pay for college, scholarships and grants can make the difference between affordability and long-term student loan debt. The rise of artificial intelligence (AI) tools has opened new ways to streamline the search process. Platforms such as ChatGPT and Perplexity can help students brainstorm possible scholarships, draft essay outlines, or build spreadsheets for tracking deadlines.But do NOT treat AI as a final authority. AI systems can “hallucinate” - inventing scholarship names, deadlines, or amounts that don’t exist. That risk makes verification essential.Students should always cross-check opportunities against reliable scholarship search tools, such as the College Board’s Scholarship Search, Fastweb, Scholarships360, or state higher education portals.Used correctly, AI can save hours of sifting through generic search results. Used carelessly, it can mislead students into chasing fake or outdated programs, or even get you disqualified from scholarships you might have earned.

Actor Chadwick Boseman became a household name after his role as King T’Challa in Marvel’s “The Black Panther.” The breakthrough film put Boseman front and center in Hollywood, and when he passed away at age 43, many fans were in disbelief. Boseman was insanely private, keeping his illness within his tight circle of friends and family. He even married his wife in a secret ceremony before his passing. One thing the star did not do, however, was file a will or trust. 

We all hope terrible situations will never hurt us or our loved ones. But making practical plans for your eventual death will make your passing easier. That’s true whether you die unexpectedly at a young age or you live to be 140 years old.Here are the six key estate planning documents that most people will eventually need. You might think all you need is a will, but once you understand how everything works, you'll see why you need all these documents and how they work together to ensure your family's needs and your final wishes are met. Remember, you don't want to end up like Chadwick Boseman's family.If you don’t have a robust estate plan, keep reading to find out what you need.

It can be confusing to understand whether you're a dependent or independent student for FAFSA and financial aid purposes.Given the current cost of higher education, college students need all the help they can get when paying for college. There are a variety of different ways to pay for college, including paying your own way, scholarships, grants, and student loans.Nearly all forms of financial aid start with filling out the Free Application for Federal Student Aid (FAFSA) form that is made available by the U.S. government. And one of the key sections of the FAFSA form is determining whether you are a dependent or independent student.Here's what you need to know.

There are many benefits to receiving one or more private scholarships. It eases the financial burden of getting a college degree and minimizes the need for student loans. And it allows you to focus on your studies while at school. But scholarship applicants can face several potential pitfalls along the way. The odds of winning scholarships are often low, and you must be mindful of scholarship scams, displacement, and scholarship taxes. By learning how to anticipate and respond to these scholarship gotchas, you can increase your chances of scholarship success. This article guides you through the many considerations you need to make before applying for scholarships, so you can feel more confident throughout the process.