I am the proud father of a local high school senior. Much of my time has been spent over the last few months on the college financial aid search process.
I thought that some of my newly acquired college financial aid knowledge may be of interest to other Minnesota patch readers.
The five things I list below are by no means a complete list of college financial aid options. I just wanted make available some things that I have learned about college financial aid over the last few months.
First, our family has spent a great deal of time applying for grants and loans from the Federal Student Aid web site. You can find the link here.
I found two other great college scholarship resources. One is Fast Web. The other is called scholarships.com.
It only makes sense that the more college scholarships that my son qualifies and applies for, the better his chances are of finding extra money for college.
The second option that I have uncovered is that having multiple kids in college at the same time is a good thing.
I have a daughter that is a current high school junior. In two years, I will have two college students in my household. That will help me qualify for more financial aid for each of my college students.
The third option is an investment management concept that I have always advised my clients on over the years. I am still surprised by the number of parents with kids the same age as mine who are unaware of the following information.
In financial aid calculations, assets belonging to parents will qualify your college student for more financial aid than assets belonging to your college student.
Money in a 529 plan is considered assets of the parents. Money in a custodial account such as a UGMA/UTMA is considered to be assets of the college student.
I am proud to say that my kids are dead broke. And that may be the best college financial planning strategy that I ever had to date.
Fourth, I am not going to borrow money from my individual company 401(k) plan account to pay for either of my kid’s college education. I know that the money I take out of my company retirement plan is used for qualified college expenses is exempt from the 10% penalty.
I don’t want to add to my parental income for the college financial aid calculations. I would save the 10% penalty on my personal taxes, but I would make it more difficult for my college student kids to get need-based financial aid.
Last, my college financial aid adventure has been a great deal of fun. Most of the time, my son has had fun as well. It has turned into a father and son version of a “find the money” game. I would highly recommend the same adventure to other parents.
Please add your comments on ideas or resources I have left out. It is not too late to educate me and the other Minnesota parents of new 2014 college students.
Ric Lager
Lager & Company, Inc.
