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No. of Recommendations: 4
When considering saving for college, its not only important to select the right investment, but also the right account registration.

I suggest doing some serious research before putting the money to work. You basically have three options - 1) put the money in your name, 2) put the money in your daughter's name, 3) some combination thereof. The reason its important to consider the registration is it may impact the availablility of fianancial aid when she enters college.

I believe financial aid offices look at both the parents' and the student's ability to pay. They expect the child to expend a larger percentage of their savings for expenses. So, if you put all the money in your daughter's name, you might preclude her from receiving other forms of student aid (grants, loans, work study, etc.) This all depends on your financial situation as well. If your middle income and below, this could make a huge difference.

Don't forget about the tax ramifications. (i.e. the "kiddie tax") If the account is registered in her name, then a set amount of income is expemt from taxes. Be sure to consult a tax advisor.

By way of example, each of my kids has a small amount in their own name. I have a much larger comingled account registered to my wife and me that we have targted for all of our kids to draw on for educational expenses.

I realize I'm raising more questions than answering. But the time you spend doing a littler research may be well worth it down the road.

Best of luck.

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