Get Educated First!
By Jack Schacht, My College Planning Team
So, you want to help your grandchild fund his or her college tuition? What a great gift! After all, paying for college is the second largest expense most families will ever tackle, as tuition continues to increase at twice the rate of inflation.
Case in point: this year, according to CollegeData.com, the average cost of an in-state public college is $24,610. The average cost at a private college is $49,320. Meanwhile, the outstanding student loan debt is approaching a mind-boggling $1.4 trillion.
No wonder so many grands want to help their grandchildren out. According to a survey by Fidelity Investments, more than half of American grandparents are either helping to fund their grandkids’ tuition or planning to do so down the road.
However, it’s not nearly as simple as writing your grandchild a nice big check. A monetary gift to your grandchild may result in a tax event on your end or interfere with financial aid eligibility on theirs. In order to avoid such financial perils and pitfalls, grandparents need to do some research and planning.