Putting college savings in a child’s name could significantly reduce your eligibility for financial aid. Correct the mistake you have now in your preparation for financing college education for your children.
Reason: Standard college tuition aid formulas consider 35% of child’s total assets to be available to pay tuition, compared with only 5.65% of a parent’s total assets. So putting assets in a child’s name can reduce, or eliminate, your eligibility for tuition aid.
Reason: Standard college tuition aid formulas consider 35% of child’s total assets to be available to pay tuition, compared with only 5.65% of a parent’s total assets. So putting assets in a child’s name can reduce, or eliminate, your eligibility for tuition aid.
Reason: Standard college tuition aid formulas consider 35% of child’s total assets to be available to pay tuition, compared with only 5.65% of a parent’s total assets. So putting assets in a child’s name can reduce, or eliminate, your eligibility for tuition aid.
Solution: Keep tuition savings in your own name. If you’ve already put money in a child’s name, consider transferring it back to yourself or to another trusted family member-through a gift –before applying for tuition aid. Annual gifts of up to $10,000 each to as many separate recipients as desired can be made free gift tax. However, if you’ve put the money into certain accounts, like UGMA’s, it legally belongs to your child.
So, knowing the above solution you can now correct the big college financing mistakes some parents didn't know.
Solution: Keep tuition savings in your own name. If you’ve already put money in a child’s name, consider transferring it back to yourself or to another trusted family member-through a gift –before applying for tuition aid. Annual gifts of up to $10,000 each to as many separate recipients as desired can be made free gift tax. However, if you’ve put the money into certain accounts, like UGMA’s, it legally belongs to your child.
So, knowing the above solution you can now correct the big college financing mistakes some parents didn't know.
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