How Savings Bonds Affect University Financial Assistance Qualifications

US savings bonds and notes are available in a variety of varieties and denominations. With regard to university funding, the Financial Assistance Officer [FAO] treats these as assets. Equally important is FAO's view of the benefits generated by your assets. Kalman Charney, the best-selling author of "Pay for not breaking the university," says "no hints" to verify "[audited financial aid jargon] ] is faster than listing interest and dividend income, and does not list the assets it comes from."

This is not to say that the benefits are not good. Au reversed, don't put money into the mattress. This interest is the only hope for you to keep up with inflation and the rapidly rising college costs.

So what do parents do? I always emphasize the ability to plan. In dealing with E-Series and EE US Savings Bonds, investors have two options: they can report interest on the bond each year, or they can report it once a year during the year in which he redeems the bond.

The second option allows investors to hold bonds when they register interest for many years. He will never pay interest until he finally makes a profit. In terms of university planning, it is best not to become a basic income year. This will definitely improve your EFC.

There are exceptions to certain series of EE bonds purchased after 1989. The government provides tax breaks for low- and middle-income parents who buy bonds, specifically for university funding. As of the 2011 tax rate, this benefit is fully applicable to single parents up to $71,000 and couples up to $106,650; some pay less than $86,100 to any single parent or less than $136,650.

We still recommend that families redeem these bonds after the student's final basic income year [after January 1st of the third year]. Tax or tax exemption, FAO still treats interest as income and evaluates it in the same way as income.

Often, investors can choose to avoid borrowing bonds in the basic income year. E and EE bonds can sometimes be converted to H or HH bonds. There is no legal requirement that bonds must be cashed at maturity. In many cases, bonds will be held and generate interest that exceeds their face value.

In any case, this scenario should be discussed with a qualified university funded consultant. Only professionals can fully assess which action makes the most sense in any given situation.

---

Orignal From: How Savings Bonds Affect University Financial Assistance Qualifications