It’s high school graduation time again, and a host of graduates are looking forward to starting the next chapter of their lives this fall when they enter college.
Grandparents often find themselves willing and able to offer financial assistance, but being the source of “Family Financial Aid” poses some potential risks, particularly in terms of a student’s ability to achieve financial aid from the school, through government programs, and the like.
College-Fund Tips For Grandparents
- 529 Savings Plan
- Let your grandchildren’s parents know if you plan to open a savings plan for their children.
- Accept their offer – or encourage them – to contribute financially whenever possible.
- Make every effort to contribute equally among grandchildren.
- Start early. Even small contributions add up to a significant amount over time.
- Do not contribute to a college savings plan if doing so places your retirement savings at risk.
- Students often think only of their own affiliations or those of their parents when applying for scholarships and grants. But your affiliations may make your grandchildren eligible for certain legacy programs.
- Think of civic organizations such as Rotary, employment affiliations such as unions, military service, religious affiliations, even race or ethnicity, when your grandchild is applying for scholarships and grants.
- Legacy scholarships sometimes are available to your grandchild at your alma mater, or at a university where you were a member of the faculty.
- Giving money directly to your grandchild may affect their financial aid eligibility if the funds are significant, or if the funds have been withdrawn from a 529 savings plan, because these funds are viewed as “student income.”
- Using funds from a student’s 529 plan to pay for freshman year can cut financial aid eligibility by up to 50 cents of every dollar of student income* (source: DailyFinance.com).
College is a huge expense, but the reward comes when your grandchild enjoys a successful college experience and is able to use the experience as a launch pad for their future career.
Outside of actually funding your grandchildren’s college tuition, you can offer assistance in other ways, such as helping with the purchase of a computer, or taking them shopping for their college wardrobe or for dorm furnishings and décor. Or, you can start a savings program to which you contribute based on the grades they earn in college, providing a potentially significant sum when they graduate.
Active adults find they are able to enjoy participating in the lives of their children and grandchildren, and live the life they’ve always dreamed in their low-maintenance ranch-style home. Each Windsong active retirement community was designed with walkable streets and a private fitness center in the clubhouse, neighbors with similar life-stage experiences, and home designs that maximize accessibility, minimize hassles and provide an opportunities to enjoy an active lifestyle.
Welcome home to Windsong – Where Life’s A Breeze!