Read loan amount for planners please

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smussluke033

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Doing some planning from 529/Coverdale accounts and wonder if anyone can share the full expense/loan amount that a cadet takes? Thanks in advance. Old answers are all over the place $8500 and above...
 
The reason it is hard to pinpoint a specific value is because it varies for each cadet, and it varies year to year. The ICA loan covers cost for items issued during swab summer and 4/c year only (up til ~Jan of 4/c year) for the following:
- uniforms - these costs vary due to differences in male and female uniforms. Costs might also vary due to size.
- books - these costs vary based on classes. During 4/c year the cadets must get their books from USCGA. After that, they can get them from anywhere else or often have online versions
- all the other stuff that is issued during swab summer or 4/c year. This has varied year to year. For example, starting 2 years ago I think they started issuing monitors, which they hadn't before. I think USCGA issued a different type of trunk to the cadets last year also. Every year they are issued a laptop, but that cost changes each year.

Since the loan isn't issued in one lump some and since payback through the cadet's monthly stipend starts right away, it is hard to quickly look up a value. Your cadet can find out their current balance, and they can check their LES's to see how much they've already paid back. However, keep in mind that if they are a current 4/c, then the amount will likely increase.
 
Thanks. Should have been REAL, not READ. Many posts of using 529/Coverdales instead of loan (and I get only accountant/tax lawyer can give answer on that), but my goal was to see what the total may have been for average cadet ..for planning. If one skips the loan, what was the total cost for the cadet the first year.
 
We paid our DS first ICA issuance from his 529 in late October. The amount was $7,341.69. We haven't received the total yet for the second issuance which will be billed in December.
 
GulfCoastalGuy said:
We paid our DS first ICA issuance from his 529 in late October. The amount was $7,341.69. We haven't received the total yet for the second issuance which will be billed in December.
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I have posted on the pros/cons of using 529s several times. Just an FYI several potential tax issues with this and it is more complex than it looks.

Search up earlier 529 posts for more info.

Good luck!
 
Haveaniceday said:
I have posted on the pros/cons of using 529s several times. Just an FYI several potential tax issues with this and it is more complex than it looks.

Search up earlier 529 posts for more info.

Good luck!
Click to expand...
Haveaniceday said:
I have posted on the pros/cons of using 529s several times. Just an FYI several potential tax issues with this and it is more complex than it looks.

Search up earlier 529 posts for more info.

Good luck!
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qualified expenses under his plan and he'll receive a 1099-q
 
Is there interest charged on the ICA loans or are these interest free?
 
Don't Give Up the Ship said:
Why would one not take a zero interest loan?
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This is our thought too. Our 4C doesn’t have a 529 that we re concerned about but even if she did I still don’t know that I would use it in this circumstance. Obviously it’s totally a personal choice but I was glad to see someone else say/think this! I think some are concerned about the amount the payoff cuts the monthly pay check but for our 4c what’s left plenty for her to have spending money and take care of extra expenses when you consider that everything you “need “ is provided.
 
A financial planner would likely recommend you take the interest free ICA loan. They are structured to be paid in full after your third year so that during your senior 1/c year when you are finally authorized a POV on campus, your ICA loan is fully paid off and you have now will have extra gas money. There are still some costs senior year outside the ICA loan like buying your sabre, etc. Plan on $800 1/c year.

I always like to make a pitch for Cadets to get started during their freshman year 4/c on a Roth IRA. Since they have income they are eligible and you don't have to max it out to benefit. You can set up a monthly transfer from checking to a Roth IRA. The 2023 max for Roth IRAs is $6,500. Even if a Cadet can put in $100 a month, it is a good habit to start. Folks recommend the Roth over the Regular IRA because most cadets are in a very low tax bracket so the tax savings from a Regular IRA don't really apply.
 
Haveaniceday said:
I have posted on the pros/cons of using 529s several times. Just an FYI several potential tax issues with this and it is more complex than it looks.

Search up earlier 529 posts for more info.

Good luck!
Click to expand...
qualified expenses and he'll receive a 1099q
 
My proud moment as a dad was when my votech kid maxed his Roth with his own money every year starting at 19. So he was listening. Interesting.... I wonder what else stuck when he wasn't talking for those five years.
 
Couple of $$ tips for after the loan:

1. After 4/c year you can buy textbooks from any source, ie: Amazon, upper-class cadets, etc. potentially saving $$ over the bookstore costs. The costs for books will not be rolled into the loan after 4/c year and cadets pay for them directly.

2. Cadets will receive training on filing their own federal taxes in January from the Academy. Lot's of detailed information that will help cadets file correctly and tips to maximize available tax deductions. You may want to explore this issue with your cadet over winter break so they are aware. They are generally advised to file as independent active duty soldiers so (with possible exception of 4/c year where they lived at home for 5 months) parents will not be able to claim them as a deduction anymore.

3. Many cadets also file state taxes in their home state others choose to file in Connecticut. With 50 states and a few territories, there are many different tax rules on this, so get in front of tax season now by figuring out what works best for you.

4. Many states have different rules for Active Duty Military, which cadets are once sworn in on Day 1. Some examples are extensions on Drivers License expiration, various tax breaks, etc. Again, research what is available to your cadet as most remain a resident of their home state.

5. Uniforms and insignia costs can add up. While at the academy, they resell at discount prices used uniform parts and insignia from cadets who disenroll from the academy for a variety of reasons. Ask about the Swap Shop which is where you can see what is available. Someone always needs something, no need to pay full price if you can get it gently used and save a few dollars.

6. Renters Insurance is available at places such as USAA and others that cover the loss or theft of military uniforms and laptops, etc. 4/c year each cadet gets about 10K worth of this stuff issued, so you may want to price out some insurance on it.

7. 4/c year is cheap as cadets do not have many privileges. The costs go up each year as they get more off base freedom and the costs that go with that. 1/c year they spend most of their pay on class dances, sword, spring break trip and the all important POV (car). If they can save some money the first few years, it will help 1/c year.

Good luck!
 
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