Tip of the Week – Keep College Savings in Your Name
Parents often start a college savings account in their child’s name because it’s the intuitive thing to do. After all, it’s the child that will be attending college, not the parent. Unfortunately there can be adverse consequences to this arrangement particularly as it relates to financial aid. When applying for financial aid, 20% of the assets in the student’s name are taken into consideration, however only 5.6% of the parental assets are considered. This means that an account with $3,500 in the child’s name will reduce the students financial aid the by same amount as a parental account with $12,500 would. Take the time to properly title college savings assets under your name, it could result in your college bound child receiving a much larger financial aid award.