Communicating with parents about their child’s assets

• Talk to parents early on in high school about finances. Making financial changes or decisions during the spring of senior year will be too late to affect FAFSA.

• Make sure parents understand that the way investment vehicles are established for minors is important. They also need to understand that tax saving advantages and increased financial aid amounts do not always come from the same place, especially in regards to a child’s assets.

• Encourage families to meet with certified financial planners who specialize in college savings if they do have significant college savings for a child.

• Stress that generous grandparents, aunts, uncles or others need to also be aware of the way financial gifts made to a student can impact financial aid.

• If you find parents who are interested in 529 plans, remind them that they are not limited to investing in the plan established by their home state.

• Keep in mind that a child’s income is assessed at a higher rate than a parent’s is. This includes earned and unearned income that could be a gift from a relative.

• It might be worth pointing out that holding savings in the parents’ name keeps control over the money with the parent. If a child enters high school and proves he or she can’t be responsible, parents won’t have to worry about that money they control going to waste on purchases they would never approve of.