Got money you want to set aside for college expenses? It could make a big difference where you stash it. Heres what an $11,000 account would do to financial aid eligibility for a student who is otherwise eligible. Well call him Tommy:
A bank or mutual fund account thats held in an adults name but as custodian for Tommy. Cost: $3,850 in financial aid the first year; 35 percent of whatever remains in the account each subsequent year.
A bank or mutual fund account thats simply in Tommys parents name. Cost: Up to $622 in financial aid the first year; 5.65 percent of whatever remains in the account each subsequent year. Cost might be zero if Tommys parents other assets are modest.
A 529 education savings account such as the Florida College Investment Plan with Tommys grandmother as the account owner and Tommy as the beneficiary. Cost: Zero. No impact on financial aid.
A prepaid tuition plan such as the Florida Prepaid College Plan. Cost: $11,000-plus over college years. Each years withdrawal reduces financial aid dollar for dollar.
