The Motley Fool Discussion Boards
Financial Planning / Paying For College
|Subject: Re: funding grandchild's college||Date: 9/5/2013 11:54 AM|
|Author: JAFO31||Number: 8074 of 8411|
covan: "I was not able to get through to Mr Baldwin, but I found another article by him that expands on the topic. Here's a partial copy:
"Paying for College: Help from Grandparents
By William Baldwin, Forbes Magazine 2/28/2013
Thinking of helping out a grandson or granddaughter? Structure your gift so that it doesn’t mess up the student’s financial aid.
If a grandparent, uncle or aunt sends money to the student to help pay for tuition, the gift will show up in the following year’s financial aid application as “untaxed income.” "
I call B.S.! Show up where? It will not be on the student's income tax return. Ans assuming that it was spent in the year received, and not on hand when the FAFSA form was completed (as noted in the further comment about money given to the parents), it will not be reported as an asset either.
"That income will be assessed at a rate of roughly 50%. If you give $1,000, the college will snatch $500."
Gifts are not income.
"This untoward result also occurs when the generous relative sends the money directly to the college billing office."
No citation for this statement. The money could be sent without indicating that it came from someone other then the student or a parent.
I doubt the accuracy of the advice, especially as a general statement.
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