Additional Financing Options 42

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). • 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. • 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). • Ask grandparents to delay gifts until after graduation. • 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.