How did you pay (or how are you paying) for college for children?

[youbet]

Got a very smart kid who goes to a college that only gives aid based on need, then they will make sure to take all of that 529 money where if you didn't have it, your financial aid award would be much higher.

If the 529b's are in grandpa's name, then the school does not even know they exist. And the money still comes out tax free.

For our son we just paid his out of state public university costs as they occured.

For his kids, we fund Coverdells (held in my son's name) and 529b's (held in my name).

 

[Rustic23]

We paid for both DW and DS's college. However, a friend of mine told me what I think is the best way. He told his kids that they were to take student loans for college. When they graduated he would assume the loans and pay them off. If they did not graduate the loans were theirs to pay off. As DS took almost 10 years to graduate (we paid for 4), I think he would have done it in 4 or 5 if the student loan bill had started coming in. In fact that happened to one of his son's that quit school and when the bill came he ask his father if the deal was still good. He said yes, son went back to school, graduated life is good.

 

[Sesq]

If the 529b's are in grandpa's name, then the school does not even know they exist. And the money still comes out tax free.

Shows up as income (for aid purposes) to the kid and impacts the following year's aid. So the ideal scenario is grandpa funds the senior year.

 

[sengsational]

Does qualifying for financial take into account the amounts you have saved in IRAs and taxable account? If so, can the taxable accounts be considered your retirement account if you've earmarked it for retirement.

What is the earmarking you mention? From what I understand, its not up to you to say what you consider retirement funds and what are not. Why wouldn't everyone just move their after tax money to a separate account, earmarked for retirement and cash in on the big financial aid windfall? No, I think its limited to IRA, 401k, annuities, etc... only those things that are considered tax advantaged by the IRS. I'm sure there would be questions about how you made $10k in dividends and interest when you had only 10k of taxable assets, hehe. You could, I suppose, buy something that didn't throw off anything reportable on your taxes and not report it, but that would be fraud.

 

[Letj]

What is the earmarking you mention? From what I understand, its not up to you to say what you consider retirement funds and what are not. Why wouldn't everyone just move their after tax money to a separate account, earmarked for retirement and cash in on the big financial aid windfall? No, I think its limited to IRA, 401k, annuities, etc... only those things that are considered tax advantaged by the IRS. I'm sure there would be questions about how you made $10k in dividends and interest when you had only 10k of taxable assets, hehe. You could, I suppose, buy something that didn't throw off anything reportable on your taxes and not report it, but that would be fraud.

Yep, makes sense.