Will your student need financial aid? Just ask your target school for their typical student expense package and the school’s scholarship application process. A good first step is the FAFSA website (www.fafsa.gov) to complete the “Free Application for Federal Student Aid.” You’ll need last year's 1040 and be prepared to list assets and liabilities similar to a mortgage … [Read more...]
College Funding Through Parents’ IRA
Turn your 401k from a “tax deferred” to a “tax free” instrument – and use it to help pay for college. Early distributions for higher-education expenses escape the usual 10% IRS penalty. (Early distribution penalties also disappear once you reach 59½.) Qualified expenses include tuition, fees, books, supplies, and a limited amount of room and board. However, penalty-free … [Read more...]
College 529 Plans: A Broken Promise
Originally designed to encourage college savings, 529 plans became a broken promise for many. Sponsored by states and colleges, 529s promise investment gains with no federal or state taxes when earmarked for education. (Some are tricky, so get tax advice before investing.) Typically, states offer deductions to in-state investors, putting more money in savers’ pockets for … [Read more...]