Grandparents value education. That is why they are willing to do everything to send their grandchildren to college for them to have a better and brighter future. But with the elderly health issues and the old ages they have, they are no longer fit to work to support their children in their financial needs in education. But there are ways grandparents can help to fund their children’s college education. Intrigued? Read on as this article will give you some tips about this.
Pay directly to college
Under the law, tuition fees paid directly to a college or university are not taxable gifts, regardless how big the payment is. Hence, one of the best ways grandparents can help their grandchildren is to pay their tuition fees directly to college. With this, you can certainly save a large amount of money against taxes.
Another way grandparents can contribute to a grandchild’s college tuition fee is through 529 plan. There are two types of this plan: prepaid tuition plans and college savings plan. The latter is an individual investment type where funds can be used in any authorized university or college in the United States. While prepaid tuition plans consider prepayment of tuition fees in the prices today for limited colleges and universities.
Making outright gift cash or securities is one of the best ways grandparents can help their grandchild’s education fees. However, there are some downsides in this method. A cash gift to a student will be taxed by the federal government and might compromise the grandchild’s financial credibility.
These are some of the ways grandparents can help children to fund their college education. If you would like to know more about financial literacy and wellness, you can visit https://knowledgefirstfinancialreviews.ca/ for more helpful financial ideas.