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Make the Baseball Scholarship Plan B

Make the Baseball Scholarship Plan B

| May 08, 2019
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A few weeks ago, a friend shared a story about her son’s baseball game.  An overzealous parent was yelling at an umpire over a call when another parent responded, “At this point we are all still paying for college!”  I couldn’t help but laugh. Clients over the years shared stories of their kids also needing an “insert sport of choice here” scholarship to afford college.  It got me thinking, maybe I should share tips for a proactive approach to your child’s education that can make a baseball scholarship Plan B.

529 Plans – This is the most common type of college savings plan.  A 529 allows for a person to use the funds towards the costs associated with higher education.  This can be applied anywhere from a traditional four-year school to a trade school to AP classes in high school.  There were changes to 529 plans in 2018, and they can now be used for costs associated with K-12 schooling.  Another benefit to 529 plans is that the distributions are tax-free if they are used for education costs.  And, if that baseball scholarship does pan out, then your Financial Advisor can help you find other ways to use the funds.

UTMA Savings Accounts – Some parents may not want to commit funds to their children’s education only.  They would rather save money that is not limited in the scope of use. I can appreciate this outlook; however, I caution the use of these accounts in that they are taxed more heavily than a 529.  The flexibility may out-way the taxes to some parents, but I would recommend speaking with a Financial Planner to determine which savings vehicle is best for your specific situation.

Scholarships – While sports scholarships tend to be what comes to mind when most people think of scholarships, there is a whole host of funds available to students wishing to further their education.  There are scholarships available through specific universities as well based on your student’s choice of major, their extracurricular interest, and even demographics. Websites like can help you search for other scholarships that may apply to your student as well.  While hunting and applying for scholarships can be time consuming, the payoff of graduating with little debt is well worth it.

Reserve Officer Training Corps – Most parents and students generally do not think of ROTC as a means of paying for college, but I have had several friends go this route. They reaped many more benefits besides a free education.  The training and experiences learned through ROTC are second to none.  The responsibilities they assume on graduation often in many cases exceed those of a typical work environment; employers recognize this when hiring them after their military commitment is up.  This may not be the path for everyone; however, for those that choose it, the rewards can be plentiful.

We do want our clients to look for the true net costs of attending each university.  While you may have a larger financial package at one school, its tuition and fees may be significantly higher than another school.  A smaller financial package at another university with lower tuition and fees may lead to a lower annual cost to the student.  While not a new or larger source of funds, this approach may make your existing resources go further.

These ideas cover a few of the available options to offset the cost of your child’s education.  Exploring alternatives for financing a student’s college education is very much like implementing a solid financial plan for your family.  The time invested in exploring the best alternatives for your situation can yield significant outcomes for your finances and for your student’s education.  The ultimate goal is to not need Plan B.

Although this information has been gathered from sources believed to be reliable, it cannot be guaranteed.  This material is intended for informational purposes only and should not be construed or acted upon as individualized tax, legal, or investment advice.  Neither FSC Securities Corporation, nor its registered representatives, offer tax or legal advice.

Investors should consider the investment objectives, risks, charges, and expenses associated with 529 plans before investing.  More information about 529 plans is available in each issuer’s official statement, which should be read carefully before investing.  Depending on your state of residence, there may be an in-state plan that offers tax and other benefits not available through an out-of-state plan.  The tax rules that apply to college investing options are complicated.  Before investing consult with your tax advisor about the tax consequences of investing in college savings plans.

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