Q: My child graduated college and we still have leftover funds in a Georgia 529 savings plan; about $5000. If I close the account out, do the leftover funds become income to me as the parent or to my child …
Are there tax penalties on a 529 plan if your child doesn’t start college by a certain date? Is a 529 plan the best way to save for college? Are contributions to a qualified 529 plan deductible? These questions and more about 529 plans are answered here.
Real Estate Minute with Ilyce Glink
Grandparents Help With Saving For College
Original Air Date: July 3, 2006
Paying for college may include a combination of student loans, grants and scholarships. In some cases, parents are willing to take out loans towards their children’s college educations as well. Parents who want to borrow money to pay for college can take out PLUS loans, which begin accruing interest right away. In addition, the first payment toward a PLUS loan must occur within 60 days of the PLUS loan’s disbursement.
When you’re trying to fund college you should look into all borrowing options. If you have significant financial need you may qualify for a federal Perkins loan. To see if you’re eligible, you should fill out a Free Application for Federal Student Aid (FAFSA) form.
When you want to get a college education you need to figure out how to fund it. One part of paying for college may include federal student aid. What criteria do you have to meet in order to get federal student aid for college?
A qualified tuition program is another name for a 529 plan, which allows you to save and invest money for college expenses. 529 plans or QTPs provide people with special tax benefits, such as accumulating earnings tax-free, if you meet education expense levels. QTPs may also be set up by educational institutions themselves.
How can you save money for college for you or your children? You can set up a 529 plan, which is named for the section of the tax code which covers it. A 529 allows you to invest money to be used toward college expenses such as books, tuition and computers. States may offer two types of 529 plans: a prepaid tuition plan or a college savings plan. Learn about 529 plans here.
Using savings bonds to pay for college has its pros and cons.
Some of your childâ€™s education is bound to be paid for through scholarships, financial aid, and student loans. The rest can only be the product of aggressive investing. To make sure your child has college money available when they need it, you have to choose a well-diversified portfolio of mutual funds and start spending less and saving more by shaving costs from your budget.