Having surplus cash in your bank account \u2013 while advisable from a financial planning point of view \u2013 may impact your child\u2019s ability to get financial aid.<\/p>\n

Consider the following three strategies for reducing your available cash while potentially benefiting yourself and your child financially:<\/p>\n

\n
1. Pay off your debts (including credit cards and loans)<\/li>\n
2. Maximize your contribution to your child\u2019s 529 college savings plan<\/li>\n
3. Maximize your contribution to your employer-sponsored and individual retirement plans<\/li>\n<\/ol>\n

   Reduce Assets in Your Child\u2019s Name<\/h3>\n

   The Department of Education assumes that money in the child’s name will be used to cover the child’s educational expenses.\u00a0 As a result, assets under your child\u2019s Social Security number (such as a standard custodial account) may impact your child\u2019s ability to get financial aid.<\/p>\n

   The 529 and Coverdell accounts are currently exceptions.\u00a0 Congress passed a law to encourage saving via these vehicles.\u00a0 As a result, these are considered parental assets even if they are open in the name of the child.<\/p>\n

   Consider converting standard custodial accounts to Coverdell or 529 plans.\u00a0 To be precise, securities held in the standard custodial account would need to be liquidated prior to contributing to a Coverdell or 529 since contributions to both accounts can only be in cash.<\/p>\n

   Please speak with a tax advisor on the ramifications of selling any securities.\u00a0 Also, speak with a financial advisor to determine if you\u2019re eligible to contribute to a Coverdell.\u00a0 Eligibility is based on your adjusted gross income.<\/p>\n

   Reduce Your Adjusted Gross Income (AGI)<\/h3>\n

   The lower your AGI, the higher your chances are of receiving financial aid for your child.\u00a0 Similar to the first point, you may:<\/p>\n

   \n
   1. Maximize your contribution to your child\u2019s 529 plan.\u00a0 If your plan is a state plan, you may be eligible for a tax write-off for a portion of your contribution.<\/li>\n
   2. Maximize your contribution to your employer-sponsor and individual retirement plans.\u00a0 Contributions may be eligible for write-offs on your taxes.<\/li>\n
   3. Speak with your tax advisor to determine if you\u2019re eligible for additional tax credits.<\/li>\n<\/ol>\n

      With patience and the right advice, your child may have the additional financial support to attend the college of his or her dreams.<\/p>\n","protected":false},"excerpt":{"rendered":"

      It\u2019s that time of year when you and your child may be looking forward to college next fall.\u00a0 You may also need to seek financial aid to help pay for it.\u00a0 This process usually […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,14],"tags":[40],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/posts\/2156"}],"collection":[{"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/comments?post=2156"}],"version-history":[{"count":15,"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/posts\/2156\/revisions"}],"predecessor-version":[{"id":3799,"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/posts\/2156\/revisions\/3799"}],"wp:attachment":[{"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/media?parent=2156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/categories?post=2156"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/tags?post=2156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}