College Funding Vehicle?

[wfs]

I would not use UL to fund college ever. No point in wasting the money on insurance costs, plus if the policy is cashed, there will be taxes on the capital gain anyway. Not to mention surrender charges.

I do not like 529s.

I say personal savings in a bank (in the parent's name) plus student loans.

Personally, I used to save in a 529 but I do not like the government telling me what I can do with my money and when. So I save in a personally-owned taxable account.

The truth is, I have never taken cash out of my taxable investments in order to pay tax (this is another flawed illustration). I have multiple real estate holdings and plenty of deductions, so I don't need to. So the money earns interest on top of interest, just like any tax-deferred investment. Same end result.

I think the whole taxable vs. tax-deferrred argument is WAY overplayed. (Maybe that discussion belongs in another thread.)

 

[crimsontideagent]

Okay for those you that do a lot of this - What vehicle and company/product combination is used most by you to put together a college funding program that will not count against the student/parent when trying to get financial aid?

Client is a family that is $75K-$100K family income. Mortgage $250K - not much equity in the house.

I think many of the other posters are thinking you are asking how to accumulate enough in that time. I feel they realize they are too late for that since you mention financial aid. There are several strategies I've used that are beneficial to them so they can get favorable financial aid treatment. PM if you would like to chat.

 

[g-squared]

No point in discussing college savings unless the parents are on track for fully funding their retirement.

Don't make the mistake my parents made. My mother, a widow, lives barely above the poverty line because she and my father had barely any retirement savings other than Social Security and my Dad's pension (which was reduced by 50% when he died). My parents spent much of their savings funding a college education for me and my sister, (for which I am certainly grateful), but did so at the expense of funding their own retirement savings.

You can always get a loan to go to college (if it makes sense from an ROI standpoint -- don't get $100k in student loans to earn a degree that nets you a $50k/year job) -- there isn't a bank in the world that will give you a loan to retire on.

(**Although, if you had planned ahead with permanent life insurance a few years back, I might be able to loan you some money that you will never have to pay back and which you don't have to pay taxes on, that you can use to supplement your retirement income. But that's a different discussion).

 

[Franz Kafka]

Spend first two years in a junior college. They're going to spend that time drinking at a 4 year college anyways.

 

[LGilmore]

This isn't a prospect for college funding. The horse has left the barn.

Financial aid, scholarships and work study are a possibility. Also consider state colleges or community college for the first two years.

About the only thng I would check on is do the parents have enough life coverage to cover college loans if they take them out or are cosigners?

The one thing going is the kids are still young enough to take HS seriously. IF they can achieve in class, they'll get money.

Both my kids school "jobs" were doing their homework. Both my kids became National Merit Scholars and between the two of them received about a quarter million in scholarship money to private schools and received a great education.

My son is about 6 months away from receiving his white coat from medical school. He will be a doctor a few days after turning 26. Not quite Doogie Howser, but pretty close.
My daugther just began her masters program in public health and is the youngest person in the group by about 5 years. They took her over Phds and other already Master degreed applicants.

Yes, I married well. The only weakness the missus has in choice of men. If they didn't look like me, I'd wonder.

Anyway, about the only advice you can give is make sure those kids hit the books and keep at it. Make sure parents are well covered even if it's additional short term "term"

 

[VolAgent]

LGilmore brings up a good point. I believe there was a thread about this some time ago. If the parents co-sign on the student loans, make sure there is enough life insurance on the children to retire the debt should something happen.

 

[BNTRS]

Spend first two years in a junior college. They're going to spend that time drinking at a 4 year college anyways.

Just during those two years? That's not what I remember from college.

LGilmore brings up a good point. I believe there was a thread about this some time ago. If the parents co-sign on the student loans, make sure there is enough life insurance on the children to retire the debt should something happen.

Yup, and I still have the article somewhere if anyone wants it.





Oh and my recommendation, gift 12k per year each to grandma and grandpa, that'll hide the 40k.

Or...

SPWL on mom and dad or grandma and grandpa. The rate of return will smoke CD's, and it'll disapear as an asset for most financial aid forms.

 

[2112Greg]

Good advice, but as everyone has said, there really isn't a magic bullet here.

In addition to the piecemeal financial products you could provide, find out about their relatives and their parents and see what scholarships might be available. There are tons of corporate money out there, but there has to be someone who worked for the company, so they are pretty specific. There are military scholarships, for example, that will pay for everything is the parent is a vet that was WIA, etc. Lots of things that you could dig up, but you need to have access to those resources.

All we do is college funding and my colleague works almost exclusively with families with kids in high school. She is amazing and finds all kinds of things because we have the resources to find things. I'd be happy to get you in touch with her...just shoot me a PM and I'll give her the info.

 

[crimsontideagent]

Just during those two years? That's not what I remember from college.



Yup, and I still have the article somewhere if anyone wants it.





Oh and my recommendation, gift 12k per year each to grandma and grandpa, that'll hide the 40k.

Or...

SPWL on mom and dad or grandma and grandpa. The rate of return will smoke CD's, and it'll disapear as an asset for most financial aid forms.

DING DING DING DING DING