November 29, 2020 4:51 pm

Paying For College: 21 Ways To Preserve Wealth according to Forbes

This guide to college finance is an expanded version of a story that appeared in Forbes magazine in January 2013. It will give you a quick survey of the opportunities and pitfalls that lie on the road to higher education.

Read it if you expect your family to qualify for financial aid and read it if you don’t. It explains those tricky aid formulas, it shows how even prosperous students might wind up with need-based aid, and it offers tax strategies that apply across the board.

If you are the parent of a college-bound child—of any age—you should be thinking right now about how your family will finance the degree. The difference between doing it right and not doing it right could easily be worth between $10,000 and $200,000.


1. How the Financial Aid Formulas Work

Know the differences between Fafsa, Profile and Consensus.

2. 529 Plans

You’ll be a winner if you find a cheap plan and get a state income tax deduction.

3. Federal Tax Credits and Deductions

To extract the most, you must plan in advance.

4. Five Rules to Protect Your Retirement

It’s tough to fill your 401(k) account when you’re getting gigantic college bills.

5. Aid Formulas and AGI

Make your reported income go down and your child’s financial aid will go up.

6. Merit Aid

It might save you $40,000 to $80,000 to go to a slightly less prestigious school.

7. Lower Cost Degrees in Europe

For a cheap degree, go abroad.

8. The Transfer Tactic

How to subtract $40,000 from the cost of a degree from a state university.

9. Help from Grandparents

Thinking of helping out a grandson or granddaughter? Structure your gift so that it doesn’t mess up the student’s financial aid.

10. Coverdell Accounts

These are stupid.

11. The Gap Year

How to engineer a profitable bunching of your kids in college.

12. Own a Business

Self-employed parents do very well in the competition for financial aid. They also get tax breaks.

13. Income Based Repayment

A tax-free fringe in certain jobs: Your education loans get forgiven.

14. The Three-Year Degree

Can you knock a year off your B.A. study? That would save you a lot of money.

15. Saving Beyond the 529

Sometimes it’s wise not to lock all your college money up in a 529 account.

16. Utma and Ugma Accounts

Custodial accounts make sense only if you are certain your child won’t be applying for financial aid.

17. The Mortgage Paydown Maneuver

Can you protect savings by putting them into your house? Yes, at certain elite schools.

18. Qualifying for In-state Tuition

How one family saved $20,000 and another might save $196,000.

19. The Military Academies

There’s a reason why military academies are hard to get into: Their economics are compelling.

20. Discounts for Academics

With a well-chosen parent, a student can save $100,000-plus.

21. Section 127 Employer Aid

How does a student get tax-free help on tuition? Through a job.


By Elizabeth Steinfeldt.


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Elizabeth Steinfeldt

Elizabeth Steinfeldt

Writing/Blogging about Finance, Investing, Economy, World News!