UTMA to 529 Conversions

529s really started to gain popularity after 2001, when qualified distributions became tax-free. Up until then, UTMA accounts were a more popular option to save on behalf of a child, and they have remained widely used. However, as financial aid calculations and rules have become more codified, the UTMA has become far less beneficial as a college savings tool. That’s because an UTMA is treated as a student asset, meaning it gets no Continue reading UTMA to 529 Conversions

FAFSA Asset Do’s and Don’t’s

It’s the busy season for insurance and annuities hucksters who tell parents of college-bound students that spending their assets to buy an insurance policy will yield all manner of financial aid benefits. Before you start making expensive moves that end up costing more in the long run, you should figure out what will really benefit you. Continue reading FAFSA Asset Do’s and Don’t’s

FAFSA Basics

This is a quick refresher on how the FAFSA works. The most important part of how it works is this: The FAFSA calculates your Expected Family Contribution. It is not the tooth fairy. The schools to which you apply use your EFC to determine your aid package. The FAFSA does not obligate them to meet your need; however, for purposes of Title IV funds (federal student aid), it does obligate schools to use standard criteria in packaging aid awards. The second most important part is this: much like preparing your taxes, you Continue reading FAFSA Basics

EFC, Net Cost and Aid Packaging

Step 1 in figuring out how to pay for college is estimating your EFC. You can use the FAFSA4caster, or the more detailed EFC Formula Guide (note that’s for 2018-2019; the 2019-2020 version should be released this month). But EFC is just a starting point: schools aren’t required to meet your need, and they certainly aren’t required to meet it through gift aid. That’s why net cost and aid packaging are important concepts to understand. Continue reading EFC, Net Cost and Aid Packaging

College Visits Whys & Hows

I received so many questions and comments on my last article about college visits that I wanted to follow up on a couple of items: Why should you make visits a priority and how can you visit a number of schools. The first point I’d make is this: It doesn’t matter which schools you visit. You will learn something that will inform your college selection process Continue reading College Visits Whys & Hows