Is this correct? Financial aid questions.

dragonmom
Thu, 24 Apr 2008 22:01:31 +0000

If grandparents or others want to help, giving directly to the parents is much better than sending that cash in the student’s bank account. If you expect even a penny of need based aid, don’t let Grandma send the money directly to the school - that would only reduce your need.
Gift tax limits are rising; for 2007 it was $12,000. Rich relative can give you more, but they have to keep track and reduce their tax free estate by that much later. Heck, if you have someone willing to give you $12,000 per year - count yourself blessed. (for the really lucky, that person can give you and your spouse each $12,000… and if a married couple - say Uncle Hardwork and Aunt Frugal - want to, they can each give you $12,000 and then each give your spouse $12,000 before Uncle Sam needs to be involved. Colleges might start to get very interested however!)