If you have two years before your student enters college …
Test Prep
Every tenth of a point added to a student’s GPA may save thousands of dollars in loans that won’t have to be paid back later because colleges will give preferential aid to good students. So now’s the time to consider test prep courses for the SAT.
Business Interest
Financial aid is based on the parents’ tax return from the base year (the year before the student enters college).
So any strategies (including tax strategies) that can lower the reported family income may help improve odds for financial aid. If you have any interest in running a business on the side or working as an independent contractor (i.e. real estate agent or MLM distributor, for example), now would be the time to start. That’s because most businesses will show losses during the first couple (or more) years which can help lower the Adjusted Gross Income and improve odds for financial aid.
Real Estate Strategies
Use home equity if you have any. The possible “triple play advantage” for this option is clear: 1.) in most cases there is a tax deduction for the interest, 2.) you temporarily reduce the equity in your property and lower your asset value which lowers your potential family contribution and 3.) as a secured loan, the interest rate is low compared to other options.
Another late-stage planning technique is to use the proceeds to buy an immediate annuity. This can shelter the capital and the payout can be used toward the mortgage payment. For details on this strategy, call for a College Cash Flow Planner Model.
FOR MORE PERSONAL TIPS, CALL STEVE @ 978-388-0020 or 617-398-7494
