Key Moves To Help Boost College Aid
Many parents assume they can't qualify for financial aid for their children's college bills. As a result, they don't bother to apply. But even with sizable incomes, parents are often eligible. "Parents with income as high as $150,000 might qualify for some aid," said Tom Brooks, president of College Funding Advisors. That can be the case if their student is going to an expensive university. With two or more kids in pricey schools, families earning as much as $200,000 might get financial assistance. To get aid, a key step is filling out the Free Application for Federal Student Aid (FAFSA). You can find it at www.fafsa.ed.gov. Fill out this form every year to apply for aid in the next academic year. One tactic: Avoid holding money in your child's name. The FAFSA formula calls for 20% of a student's assets to be spent on college. But parents' assets are assessed no higher than 5.64%. Now money can be invested in a 529 plan in the parent's name. There will be no income tax if the investment income is withdrawn and spent on college. The FAFSA's financial aid assessment on the 529 balance will be only 5.64%.