If your family is on the cusp of qualifying for need-based financial aid, or will qualify for financial aid, here are some additional tips to maximize your aid eligibility: • Save in parents’ name, not in custodial accounts (they’re not exempt). •
Things you can do today to start planning for financial decisions:
Spend down student’s assets.
Shift assets to exempt vehicles: IRA, life insurance, GET plan, home equity. •
Accelerate necessary expenses to be cash poor: computer, car, home repairs, etc. •
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Minimize capital gains.
Maximize contributions to retirement plan. Do not withdraw from retirement fund to finance college (distributions = taxable income). If you must, borrow from yourself (via a home equity loan, for example). •
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Ask grandparents to delay gifts until after graduation.
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Prepay mortgage.
Put a 529 plan in the name of parents or grandparents for minimal/no impact on aid. •
Taxpayer Relief Act Education tax credits and interest deductions are available for some students. Families are advised to consult with a tax professional to determine whether they can benefit. For information, go to the Department of Education website, www.ed.gov.
COLLEGE COUNSELING AT UNIVERSITY PREP 2021–2022 43
FINANCIAL AID
Maximizing Financial Aid Eligibility
