Paying for College Without Going Broke

A primary purpose for many trust funds is to have money available for children or relatives to attend college. The manner in which these savings are handled can impact financial aid.

In my research on financial aid this book titled “Paying for College Without Going Broke” received high marks. The 2011 edition is available at Amazon for under $14 and is a good start for anyone considering the impact of various types of financial situations on financial aid.

I will go through this book in more detail in the future but generally it says that putting funds in the child’s name is a bad idea if you believe that he / she will qualify for financial aid. In the case of these trust funds, there are specific reasons why I set them up in the manner that I did but if I thought one of the children really would qualify for financial aid then I would consider transferring the funds into a 529 account which for some reason shields those funds from consideration for financial aid (probably so families wouldn’t be discouraged from saving in the first place). Until recently the Illinois 529 plan was not very good in terms of investment options but over the last couple of years they added index funds from Vanguard and other fund providers with much lower expense ratios which makes it a more viable option (yes I also understand that you can invest in 529 plans outside your home state but that is another complicated topic).

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