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Category Archives for Affording College

How do People Pay for College?

A Big-Ticket Item

The cost of a post-high school education is frightening for many families. The cost-of-attendance per year / per child will run somewhere between $10,000 at a community college and $75,000 at a private or out-of-state college. The total cost of a college education can quickly add up to between $20,000 and $250,000 per child. This leads many families to ask: how do people pay for college?Continue reading

Free Money for College

Money for College

Many families are enticed by the notion of “free money for college”. Receiving free money sounds great. Yet most families with college-bound students do not understand how this works. Their expectations are often way out-of-line. Many households believe they will not get any free money and yet others are convinced their children will receive all the free money for college that they will need. Before one gets too excited, let’s clarify the basics.

What is “Free Money for College”?

In the United States, the cost-of-attendance for a post-secondary education will generally run between $10,000 and $70,000  per year / per student. The costs for a four-year Continue reading

Best Way to Pay for College

Every Family will have to make this Decision

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.

Two Ways to Pay for College

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.

Paying with your “Household’s Money”

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 Rental Property Impacts Student Financial Aid

Rental Property is Investment Property

“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? Rental property will have an impact on your ability to afford college.

Three Distinctions with Rental Property

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.

Ownership

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