Many financial advisors have finally let the dirty secret out of the bag: you have no obligation to put your child through school. Most parents obviously want the best life for their posterity but there are convincing arguments that you will do much greater good by requiring them to fund their own education. Perhaps the best solution is to wait until after graduation – evaluate the academic performance, the professional drive, and the qualitative characters objectively. If you like what you see, offer to pay for all or a portion of the education. That way, if little John takes seven years to graduate because he’s spending all of his free time at frat parties, he can bear the consequences while you enjoy your new Mercedes.
Regardless of your opinion on the matter, it is vital that you save for your retirement before you put funds aside for your child’s education. If you are short on cash when it is time for the kids to go to college, there are numerous low-interest, highly-favorable loan options available in addition to scholarships, grants, and Federal aid; if you arrive with empty-pockets at retirement, however, there is no one there to help fund your lifestyle.
Investing Education Assets for Financial Aid
Financial aid calculations are more favorable when assets are held in the parents’ name, rather than the child's. You can find more information in the
Investing for College category.
