Message Font: Serif | Sans-Serif
No. of Recommendations: 0
From the Tax Strategies board, if one wants to help pay a niece or nephew's college expenses, in order to avoid the risk of hitting the $13k/yr gift limit, one should pay the college directly. Another poster asked the follow-up question:

...he is going to be applying for scholarship help and/or loans, presumably on the basis that his parents don't earn a lot and have scant savings. Won't it be weird (or even trigger some red flags) if he gets financial assistance from the school and then his other expenses are paid for by a third party (like us)?...

I have the same question. My niece's family has neither savings nor extra income, and I am considering helping bridge the difference between her scholarships and the actual college costs. But if her scholarships get reduced by the amount of my contribution, that would defeat the purpose, wouldn't it?

My 1st thought was that only her immediate family's assets and income would count; however, financial aid forms do ask for disclosure of any outside grants received. For example, if a student's high school gives its graduating seniors scholarship money as awards for most hours volunteered, good sportsmanship, academics, etc., that would count. So it's unclear how help from grandparents (or other relatives not legally responsible) would be counted. As other poster said, if you pay the college directly, they would certainly know about it.

So: how do payments by aunts/uncles/grandparents to a college affect the scholarships or other aid for which the student is eligible?
Print the post  


Paying For School Guide
Trying to Tackle Tuition? The Motley Fool's Guide to Paying for School will help you fight those rising education costs.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.