Family Financial Connections archive
Date: August 2014
RALEIGH, NC (AP)– Why are school districts lamenting cuts and harmful layoffs when the new North Carolina state spending plan enhanced total public school spending by $237 million? And how can lawmakers and Gov. Pat McCrory thump their chests about conserving teacher assistant jobs when cash set aside for them declined?
Thank the complicated North Carolina spending plan process, where apparent spending decreases on paper can become actual spending boosts. And line products for money going to districts for things like educators, support personnel and instructional supplies do not suggest as much now because legislators in 2013 additionally loosened constraints on their use.
Members of the Kansas Board of Regents will learn about means of assigning funds to universities based upon performance, instead of enrollment, The Lawrence Journal-World reports.
A big topic of discussion at the Board of Regents refuge today is efficiency- or outcomes-based budgeting. The concept involves setting goals that schools need to strike in order to receive optimum financing.
Kansas previously accepted a system of tying funding to specific objectives, however the concept has been pulled back due to the fact that greater education hasn’t gotten new base funding.
Dear Dr. Don,
Our only youngster is starting college this fall. My partner and I have conserved enough money to pay for our daughters college education. Would there be any tax advantage if we take out a loan for her tuition and make use of the moneythe cash we conserve for school to pay the loan back?
– Joe Junior
I get things similar to this from house owners trying to choose whether to use their portfolio funds to pay for a home loan.
One alternative would have you keep your money invested. Your little girl takes out Federal Direct Student Loans while you acquire PLUS loans, potentially as well as personal student loans. You would need to fill out FAFSA, or Free Application for Federal Student Aid, types.
If your portfolio is held in a taxable brokerage account, you could borrow through a margin loan to fund the college costs rather of student loans. Moms and dads sometimes likewise think about house equity lines or loans to money these costs.
As long as your portfolio has an after-tax yield greater than the efficient interest rate on the loans, youre much better off staying invested compared to offering off the portfolio to money college expenses.
Instead of paying the college expenditures as they take place, youd take cash from the portfolio to make the loan payments.
Id suggest that you talk with your tax professional about the tax deductibility of the student loan interest expenditure and compare that with the other types of loans youre considering.
If your college funds are bought a tax-advantaged Section 529 plan, then the concerns are various. To keep the tax benefit, you needhave to make use of circulations only for qualified education expenditures. In general that does not include student loan payments. When it come to the 529 funds, youd needhave to pay those directly toward certified expenses, such as tuition.
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To ask a concern of Dr. Don, go to the Ask the Specialists page and select among these subjects: Financing a home, Conserving and Investing or Cash. Read moreLearn more Dr. Don columns for additional personal finance suggestions.
Copyright 2014, Bankrate Inc.
Valley Falls The Kansas Board of Regents and essential state lawmakers on Wednesday concurred to move forward on a possible change in higher education financing that would be based upon the attainment of certain objectives.
However Kansas University Chancellor Bernadette Gray-Little spoke versus the proposition. The reality is that many locations that have done performance-based funding, it has actually not worked, she stated.
Regents Chairman Kenny Wilk, nevertheless, said he hopedwished to have a performance-based budgeting proposal prepared by the end of the year so that the Legislature might consider it during the 2015 session, which starts in January.
State Sen. Ty Masterson, R-Andover, and chairman of the Senate Ways and Way Committee, supported the idea. The end goal is to have even more of our kids much better informed, he stated.
The choice to deal with the plan was reached throughout the regents pull away after a presentation on performance-based budgeting by Dennis Jones, president of National Center for Greater Education Management Systems. No choice was made on how much financing would be tied to performance under any future proposition.
Jones stated many states were considering performance-based budgeting and he forecasted that a bulk of states would implement the system in the next two years.
Tying state post-secondary financing to certain objectives can help the states economy and provide even more task opportunities, he stated.
Jones stated the key to making the system work is for greater education officials and lawmakers to agree on the metrics that will be used to measure schools efficiencies.
Prospective metrics for Kansas that were gone over included basing financing on increasing the number of undergraduate certificates and degrees awarded, with additional weight offered for adults and at-risk youth who achieve highercollege.
There could also be moneying based on the development that students make with the system and those who graduate with degrees in high-demand fields.
KU Chancellor Gray-Little said issues have turned up in other states with performance-based financing. As an example, she said some schools have produced useless credentials to secure funding. She said KU currently examines its performance, and she prompted careful consideration of the plan as the regents moved forward.
Rep. Jerry Henry, of Atchison, who is the ranking Democrat on the Residence Appropriations Committee, stated he was afraid that schools would refuse to allow students to pursue certain degree strategies if that harmed the organizations opportunity of attaining performance-based funding.
I stressstress over the cherry-picking, he said.
Gov. Sam Brownbacks chief of personnel, Landon Fulmer, said the governors office desired buy-in from the Legislature on the proposition. We do not really want to out-kick our protection, he said.
Higher education in Kansas deals with funding difficulties with funding levels still below pre-recession levels.
In 2013, the Legislature passed and Brownback signed into law decreases to universities that resulted in Kansas University taking a $13.5 million cut.
This year, the Legislature and Brownback restored some however not all those funds.
The cuts in income tax rates signed into law by Brownback have actually also figured into the equation. Critics state Brownbacks tax policies will cut a lot income, the state will certainly have trouble moneying universities, public schools and other services. Brownback has stated the cuts will grow the economy.
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