How Parents Avoid The Poorhouse Before Students Enter College
Boca Raton, FL June 29, 2006 - Believe it or not, most colleges salivate at the prospect of a needy student with a 529 Savings Plan. It enables these “poor” institutions of higher learning to reduce financial aid dollar for dollar and enrich their billion dollar endowment funds.
“529 Savings Plans are a financial hazard to the average family, and must be avoided at all costs.” So says Reecy Aresty, the nation’s foremost authority on college admissions and financial aid. He’s a veteran radio and TV guest pioneering a subject of immense concern to millions of families, and author of the everything-you-need-to-know manual, “Getting into College and Paying for It!,” the only book of its kind available in Spanish.
With over 25 years of playing the financial aid game, Aresty says, “In the financial aid formulas, students have no asset protection allowance, and for college year 2007-2008, 20% of every dollar they have will be lost in financial aid.” Parents are more fortunate; they’re only assessed at 5.6% over their allowance. However, if the student is about to enter college and is unfortunate enough to have a hefty bank balance or brokerage account, it already cost them 25% or 35% in lost financial aid, depending on the college.
If a family will qualify for financial aid, and most do, then those with money in 529 Savings Plans face a far worse fate - all that money (often $100,000 or more) which could have been legally repositioned outside the financial aid formulas will all be spent, often before graduation.
A number of states have made contributions state-tax deductible with North Carolina and Pennsylvania next in line. But here’s the rub. A 529 Savings Plan is considered a parent asset when calculating financial aid eligibility, and families will lose 5.6% of the value in financial aid every year. What’s worse is that colleges treat money in a 529 Plan as a resource, reducing financial aid dollar for dollar.
When confronted with the facts, financial aid officers nationwide have made comments such as: “Depending upon the value, there will be annual distributions to pay for tuition and fees.” “Our calculations may vary from year to year.” And this disturbing remark from a prestigious school in New England: “Financial aid is not the issue here, paying for the student’s education is.”
The sad truth is that literally tens of millions of dollars a year are unnecessarily wasted because families are not made aware of the consequences when setting up these accounts. Additionally, numerous brokerage firms have been sued and suspended for misrepresenting 529 Plans in general.
Reecy Aresty and his revealing book, “Getting Into College And Paying For It!” exposes the truth. Parents will also learn numerous admissions strategies to guarantee the student that all-important edge to the college of their choice at application time, because, as Reecy says, “all the financial aid in the world is worthless without an admission ticket.”
Reecy’s company, College Assistance, Inc., in conjunction with College Funding Prep of Norfolk, MA presents free monthly seminars that take families from the first day of 9th grade up to and including attending college.
- Contact Information
- Reecy Aresty
- College admissions and financial aid expert
- Payless For College, Inc.
- Contact via E-mail
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