Grandparents: Study Up on How Best to Help With College Costs.
Are you a grandparent who wants to help pay for your grand-child’s college? There are many different issues that must be considered before such a big decision. According to this article, it is recommended that grandparents should not help with college unless they have enough funds set aside for their own retirement. After determining that there are sufficient funds for helping with your grand-child’s college, you should first know that any financial gift to the student in the year prior to college will count AGAINST their eligibility for financial aid. Another negative for giving cash to the student is that there is no guarantee the funds will be used for college (hey, lets go shopping for new clothes or get some beer!). Other options include giving to a 529 college-savings account or paying the college directly for the tuition (which can also affect their eligibility for financial aid).
What appears to be the best option, is to help pay off the college loans AFTER the student has graduated. Paying directly to the loaning institution (versus cash to the student that may again- be used for other things) seems to be the best option! For detailed information on this topic, read the article!