Planning for college ultimately should begin around your child's first year of life. Many times, in fact, more so than not, this just does not seem to happen. The financial burden of your child receiving the best college degree and life experience can be devastating if you don't plan.
One thing many people do not think of is that you can get financial aid for your college student and it does not matter how much money you, as a parent earn.
There are really two ways to insure that you don't have to pay the going rate to send your child to college.
The first is tax savings. The Internal Revenue Code has many tax incentives for higher education. The second way is financial aid. Financial aid is where colleges arrange for loans, jobs, and grants to help students, and their parents with the bills. In fact, the number one mistake parents make when they are in the college application stage of planning for college is that they don't fill out the financial aid form, as they do not think they will qualify. This could not be farther from the truth. Most colleges offer what is called "Merit Based Aid" which pays for tuition and gives discounts.
Always apply for financial aid when filling out the college application -- and here is why this is important. Even though Merit Based Aid has nothing to do with finances, most colleges do not offer Merit Based Aid to students who have not applied for financial aid.
There are some colleges who simply do not offer Merit Based Aid. These are the more elite colleges. Families who apply for financial aid in these colleges are assigned what is called "Expected Family Contributions" based on income and assets. As a parent, your assets are protected. For the student the assets are expected to be used for college costs.
So the big hint here is, and this is why planning for college should be done as early as possible, keep assets in your name, not in your child's name. You may also want to go a bit wild and overboard on investments that are not counted such as life insurance, annuities, and tax-deferred retirement plans. It is also good to know that home equity is not counted.
Plan early and plan wisely and the cost of a college degree can be your child's for much less than you think.
David W. Ratliff is the President and Co-Founder of College Degree Planners, LLC. A College Planning Specialist since 2001, we provide college planning and preparation assistance for your child is what College Degree Planners is all about. Adequately planning for college can include college selection, scholarships, and participating in college prep programs as well as simply knowing the college planning, college loans, and prep time lines, early preparation is the key. For more information on helping your child plan for college, visit David's web site: http://www.collegedegreeplanners.com |
No comments:
Post a Comment