All parents want to pay the least amount of money for the best quality post-high school education (college) for their children. As the time comes closer to writing the checks or signing-off on the loan documents, the more critical it becomes to understand the dynamics of the best way to pay for college. Every family will have to decide how they will fund college. Due to the vastly different financial resources available to families, this post will serve as an introduction.
There are general two ways to pay for college: either with your household’s money or with someone else’s money. Let’s look at each of these.
The first way to fund college expenses is to pay with your own household’s resources. When I say “household resources”, I am referring to funding from either the parent (as understood on the FAFSA) and / or your student. This type of funding comes in one of two Continue reading
“How will rental property impact our student’s financial aid?” This is a question I often hear from parents at this time of year. Normally they are referring to investment property such as the rental of farm land or the rental of an apartment or a house. How will this be treated?
There are three main distinctions with regards to rental property that one needs to be aware of: Ownership, Net Income and the Net Worth of the asset.
In most cases, when a student (under age 24 and single) is filing the FAFSA, they will be considered a dependent of the parent(s). Whoever owns the property must report the net income generated and the net worth of the asset on the FAFSA (Free Application for Federal Student Aid). In most cases, Continue reading
“We have over $50,000 in student debt. Now what do we do?” asked a bewildered couple with their daughter who had just graduated from college. “Our daughter is earning $42,000 a year and is in no position to pay her rent and the loan interest.”
Most of us have heard that the student loan debt in the United States is around the $1.3 trillion mark. This is divided upon many families – both young and old. At present, the $1.3 trillion figure is increasing, rather than decreasing. The above mentioned situation with the couple and their daughter is not as uncommonContinue reading