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RE: I NEED ADVICE FROM MY FELLOW STEEMIANS. "HELP!"

in #steem8 years ago

I don't have a direct answer for you but I do have some insight into financing for college. My eldest just graduated, I still have one in college and one in high school. Several years ago, prior to any of my children being in college I had a client who was a financial aid officer at a local University. My client explained to me how financial aid, be it loans, grants or scholarships was determined. Some assets were considered when determining the amount of aid available. First on the list was income, second cash in bank accounts and stock market accounts, 529 college savings accounts and finally any property other than your primary residence. The assets not considered were your primary residence, health savings accounts and retirement accounts. So the more you make, the more you save, the more you invest the less aid (much of which is purely grant and scholarships) you get. My conclusions were, and my client agreed, that by my eldest's junior year of high school, I needed to use most of my savings to pay off my mortgage. Second, I had to limit my income by maximizing contributions to my retirement accounts or if applicable a health savings account. Third, do not put any money in a 529 savings account until the mortgage is paid and retirement accounts are funded. Remember you can make a withdraw from an IRA penalty free (not tax free) if the funds are used to pay college expenses.

My biggest caveat is that our systems both education and financial are breaking down. What has been true in the past is not likely to be true in the future. This is the strategy that has worked well for my family thus far. Most of the expense were paid for by grants and need based scholarships and finally by student loans that are manageable. My eldest's student loans are about what mine were some 30 years ago - not bad. Just some food for thought.