1. Personal Finance
Student Loans

2. I. The Cost of College

3. I. The Cost of College

4. I. The Cost of College

5. II. Saving for College Custodial Accounts
Parents control until the child reaches 18 or 21, depending upon your state.
Interest and dividend income may be taxable.
Once the kid gains control of the account the taxes on income decreases.
Education Savings Account
Savings in these accounts will count as assets with FASFA.
Limits on transfers to these accounts.
Upon withdrawal, the investment earnings are not taxes as long as the money is used to education expenses.
State-sponsored College Plans
Money compounds without tax and if used for education expenses the investment earnings can be withdrawn tax-free.
Must be used to education expenses, but allows you to change beneficiary.

6. III. Financial Aid Loans Direct loans, Stafford loans, and PLUS.
Interest rates on federal loans, tend to be similar to those of fixed-rate mortgages.
Some loans are available even if FASFA does not deem your family needy.
Grants
Available from the federal government, state government, and higher education institutions, grants are usually awarded to financial need and tuition rates.
State and private grants require a separate application.
Scholarships
Available from the school, local community, and civic groups.
Separate application process.
Check for scholarships and grants from the university you plan to attend.
Also look into work-study programs.
Plus (Parent loan for undergraduate studies); subsidized vs. unsubsidized Stafford loans; if you need more money than your limit allows, PLUS loans can fill the gaps. You cannot qualify for a federal loan if you have negative credit (recent bankruptcy, more than three debts over three months past due and so on.) Home owners can borrow against their equity; parents can make penalty-free withdrawals from individual retirement accounts if the funds are used for college expenses. Most states will treat it as taxable income

7. IV. The Federal Student Aid Process
Apply for FASFA. (Make sure to update after tax season.)
Receive your Student Aid report. (It is automatically sent to indicated universities)
The universities will decide how much student aid you qualify for. (Typically decided during the early summer, before fall semester.)
Original application is an estimate, after tax season you update to verify; run through a needs analysis, which considered income and assets, age and need for retirement income, number of dependents, number of members in college, and unusual circumstanmces; determines how much money you are expected to contribute; even if do not qualify for need-based funding; you may still qualify for loans. Retirement savings are not counted for FASFA; when saving for a kid put it in your name, because if it’s in your kids name you will be expected to pay more for college.