For parents with kids heading off to college in the next few years, it’s not too late to implement these last minute savings tips.
1.) Compromise on School. Parents and children should have open and honest conversations and make their school choice based on learning needs and career ambitions, not name recognition.
2.) Take Advantage of Government Loans. Every family should take advantage of government education loans. According to Bill Harris, founder of online wealth management company Personal Capital, there is no “means testing” with the Stafford Loan, which means a family making $200,000 and one making $40,000 are both eligible.
3.) Invest in a 529-College Savings Plan. The earlier parents start funding a 529-college savings plan, which is a tax advantaged way to save for the college, the better, but it’s never too late to start. Many states give tax deductions for contributing to a 529-plan.
4.) Take advantage of American Opportunity Tax Credit. Families with an overall income under $160,000 per year, or $80,000 for single filers, can qualify for a tax credit of up to $2,500 during the first four years of a child’s college education. This tax credit includes expenses for things like books, supplies and equipment that aren’t necessarily paid to the college or university.
5.) Move Assets out of a Child’s Name. Many parents open savings accounts in their children’s name, which is a great way to build a nest egg, but it can have a negative impact when it comes to paying for college. When determining eligibility for federal financial aid, 20% of any assets under the child’s name will count against him or her in the amount of aid offered.
6.) Explore Alternative Loan Types. Most private loans from a bank of credit union have higher costs and higher rates of interest. Instead, consider peer-to-peer lenders to see if they offer a lower fixed rate and always check with the financial aid department at your college to see what kind of tuition assistance is offered.
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.