assetts in students name will hurt the financial aid received 2X more
than that if same asset was in parents name. I read that on this board
sometime ago and have also read something similar in smartmoney
magazine many years ago.

the financial aid forms you fill out will allow you:

1) to get stafford and other educational loans which can defer interest
until graduation
2) allow for work study employment on campus
3) the same forms are used on scholarship applications
4) and then some merit based aid from the school

but most aid DD receives will come from sources she finds. National
Merit Scholarhsip is one example. My soccer club gives out 10 $500
scholarships each year. Needs to be someone which played soccer, or
reffed soccer and no educational achievment is needed (not based on
grades). Many other organizations will have similar programs- a little
research and leg work can pay for lots of education. Being involved in
activities outside of school can also help.

Don't disqualify yourself, when you are making plans be sure to visit the
college's financial aid office and learn how they make decisions. There is
often more going into the decision than the pay stub.

Good luck.


"zxcvbob" <zxcvbob[at]charter.net> wrote in message
news:3sb0p9Fmt1tpU1[at]individual.net...
- quote -

bo peep wrote:
- quote -


From what I can tell, the Coverdell (new name for educational IRA)
account does count as an asset of the account holder for financial aid
calculations. So I don't see where this would help with anything. The
new contribution limits are $2000 per year, but they will revert back to
$500 in December 2010.

We're not all that well off, but because I've been frugal and saved
every spare nickel, and retired debt as quickly as possible, DD is not
going to qualify for any significant financial aid anyway. If we were
deep in debt from living beyond our means, she would get all kinds of
financial aid no matter how what my salary is.

I have my fingers crossed that she will get a National Merit
Scholarship; she can use that UTMA account someday to buy herself a house.

Best regards,
Bob

<<But what do you mean about "where you put the money"?>
She could put $500/year into an educational IRA, even with no income.
Some colleges would consider the Roth against her aid needs, but not
the educational IRA. See
http://www.findarticles.com/p/articl...55/ai_72050307

<<Last year I stopped contributing to this Fidelity account and instead
put some money in her name in a Roth IRA, but I'm limited how much I
can put there by her *tiny* amount of earned income.>
Same answer - the educational IRA can soak up some extra funds,
regardless of earned income.

John Cowart

bo peep wrote:

- quote -

The money is already in her name and I can't legally change that. Some
of our other savings are in her name, but most of them are in my name.
But what do you mean about "where you put the money"?

Last year I stopped contributing to this Fidelity account and instead
put some money in her name in a Roth IRA, but I'm limited how much I can
put there by her *tiny* amount of earned income.

Bob

<<DD might not even have to tap this account, depending on how
expensive her school is and what kind of financial aid package she
gets.>
Keep in mind that where you put the money, and in whose name you put
it, can have an impact on her financial aid situation.

John Cowart

zxcvbob <zxcvbob[at]charter.net> writes:

- quote -

The (federal) tax on $3500 of gap gains will be at most $525.
And if she's over 14, the gain is taxed to her, which means it'll
almost definitely be taxed at most 5% ($175).

So there's not much of a tax reason to keep the money there.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

DD's college fund, that I started regular monthly contributions when she
was less than 1 yo, is invested in Fidelity Blue Chip Growth fund. It's
a UTMA account (so the money belongs to DD) and I'm the trustee. The
performance has been pitiful. I'm just now realizing that the fund has
underperformed it's peers for years, and so the problem is probably bad
management. Bad management stays bad.

There's about $24500 in there now; the cost basis is about $20800.
There's just a few more years before DD goes to college; luckily I have
other savings besides this, and my mortgage and cars are all paid off,
so DD might not even have to tap this account, depending on how
expensive her school is and what kind of financial aid package she gets.

Should I close this account and put the money somewhere else? The
reason I'm asking is because of the taxes she would owe on the $3500
capital gains if I take the money out of that fund.

I shoulda listened to my dad and put all the college savings into US
Savings Bonds.

Thanks...
Bob