Tips to Save Money for My Children – Part III


How can educational grants aid me in this situation?

There is a distinct difference between loans and educational grants. If you are having a tough time, it is safer and better to opt for educational grants. The advantage of grants supersedes the other because if you opt for educational loans, you will have to pay it back. This “pay back” facility can be avoided by opting for educational grants. Am I eligible for an educational grant? Well, that part is decided according to certain guidelines. The average annual earning of the breadwinners (for the family) along with the fee’s structure of the college will be the ultimate deciding factors. Some types of grants will be illustrated in the following sections.

  • Guaranteed Student Loans: The GSL has now been replaced with Stafford loans. The federal government with the aid of the local financial organizations normally grants the loan to the needy. One will have to bear in mind that the loan is normally provided in the form of a subsidy.  If you are eligible for it, you might even check out the non-subsidized version of the same program. The Stafford loans are usually termed as “loans that are based on needs”. In simpler terms, only the eligible will be provided with the loan.
  • Perkins Loans: This is another form of educational grant, which is gaining favor in the minds of many people. Just like the previously discussed Stafford loans, the federal government also provides this loan. In order to provide this grant, the government is noted to work in close tie-up with the schools and colleges. Hence, if you are interested in applying for the same, it would be wiser to contact the school or college administration.
  • Parent loans for undergraduate students: Furthermore termed as PLUS in the financial circles, the federal government will sanction the loan only to the parents. This is in stark contrast of the rest of the other two, which were discussed earlier. Inform the school or college authorities in order to discuss the guidelines for the PLUS program.

Is there any manner with the aid of which one will be able to augment the financial aid rendered to their child?

If you are looking forward to answering the above-mentioned query, here are certain steps that can be considered:

  • The name holder of your assets must not be bestowed to your child: This is seen as a risky situation by many financial organizations.
  • Maintain a clean credit record: It is mandatory to keep the credit score at feasible levels. Banks are noted to scrutiny these scores and will decide the eligibility only if they are satisfied with your existing financial situation. Pay your bills and taxes at the appropriate intervals.
  • Take a straightforward approach: It is imperative to stick with the truth when you are dealing with these officials. Ensure that the authorities are kept in the loop by explaining any/all the financial difficulties experienced by you.

How can I get rid of the taxes levied to the savings, which I had painstakingly collected all these years?

  • Watch out for the taxable income of your child: If possible, always maintain it below $1900. The threshold was $1800 in 2008. The 19-year age barrier must also be taken into thought.
  • US Saving Bonds: As I had mentioned earlier, it is better to opt for this type of bonds as the returns are always to the higher side.
  • Invest on stocks: You should have a clear understanding of the stocks that appreciate and depreciate over the course of years. Invest on those, which are steadily appreciating.
  • Employ your child: Yes, that is true – if you employ your child (at your business), you will be able to skim clear of the “kiddie taxes”.
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