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$viewFile = '/var/www/vhosts/vcc_staging/app/View/Layouts/aarp_2023.ctp' $dataForView = array( 'content_for_layout' => '<div class="row twoColumnLayout"> <div class="col-md-8 left-rail"><div class="module clearfix"><div class="ar-basic-box"> <div> <div class="module-spacer"> <header><h1 class="article-headline">The Cost of Love: Is Helping Your Grandchild with Tuition the Right Choice?</h1></header> <div class="posted-on"> Posted on 01/29/25 by <b>Adrion Bell</b> </div> </div> <div class="module-spacer"> <span class="blog-content"><p><div class="RichTextArticleBody"> <div class="RichTextArticleBody-body"><p>You have raised your children, often footing their bills from t-ball and dance lessons to proms, car down payments, and weddings. You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. 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You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. 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$viewFile = '/var/www/vhosts/vcc_staging/app/View/Layouts/aarp_2023.ctp' $dataForView = array( 'content_for_layout' => '<div class="row twoColumnLayout"> <div class="col-md-8 left-rail"><div class="module clearfix"><div class="ar-basic-box"> <div> <div class="module-spacer"> <header><h1 class="article-headline">The Cost of Love: Is Helping Your Grandchild with Tuition the Right Choice?</h1></header> <div class="posted-on"> Posted on 01/29/25 by <b>Adrion Bell</b> </div> </div> <div class="module-spacer"> <span class="blog-content"><p><div class="RichTextArticleBody"> <div class="RichTextArticleBody-body"><p>You have raised your children, often footing their bills from t-ball and dance lessons to proms, car down payments, and weddings. You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. Visit the <a href="https://states.aarp.org/region/georgia/" target="_blank">AARP Georgia</a> page for more news, events, and programs affecting retirement, health care, and more.</i></p> </div> </div><div class="module clearfix"><script src="https://npmcdn.com/flickity@2/dist/flickity.pkgd.min.js"></script> <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.d703996ba6a992470f9f7fa2170736df.gz.js"></script> <link class="Webpack-css" rel="stylesheet" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.2cef3303b65f09149a6db29044f033cb.gz.css"> <!-- <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.c85a242a55150cd195e494cd6e5b9c77.gz.js" async=""></script> <link rel="stylesheet" media="all" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.bfe6eb5a8301841feef3af4e9bd1e26d.gz.css"> --> <!-- bypass --> <style> a:focus, a:hover { text-decoration: underline; 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You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. 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$viewFile = '/var/www/vhosts/vcc_staging/app/View/Layouts/aarp_2023.ctp' $dataForView = array( 'content_for_layout' => '<div class="row twoColumnLayout"> <div class="col-md-8 left-rail"><div class="module clearfix"><div class="ar-basic-box"> <div> <div class="module-spacer"> <header><h1 class="article-headline">The Cost of Love: Is Helping Your Grandchild with Tuition the Right Choice?</h1></header> <div class="posted-on"> Posted on 01/29/25 by <b>Adrion Bell</b> </div> </div> <div class="module-spacer"> <span class="blog-content"><p><div class="RichTextArticleBody"> <div class="RichTextArticleBody-body"><p>You have raised your children, often footing their bills from t-ball and dance lessons to proms, car down payments, and weddings. You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. Visit the <a href="https://states.aarp.org/region/georgia/" target="_blank">AARP Georgia</a> page for more news, events, and programs affecting retirement, health care, and more.</i></p> </div> </div><div class="module clearfix"><script src="https://npmcdn.com/flickity@2/dist/flickity.pkgd.min.js"></script> <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.d703996ba6a992470f9f7fa2170736df.gz.js"></script> <link class="Webpack-css" rel="stylesheet" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.2cef3303b65f09149a6db29044f033cb.gz.css"> <!-- <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.c85a242a55150cd195e494cd6e5b9c77.gz.js" async=""></script> <link rel="stylesheet" media="all" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.bfe6eb5a8301841feef3af4e9bd1e26d.gz.css"> --> <!-- bypass --> <style> a:focus, a:hover { text-decoration: underline; 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You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. Visit the <a href="https://states.aarp.org/region/georgia/" target="_blank">AARP Georgia</a> page for more news, events, and programs affecting retirement, health care, and more.</i></p> </div> </div><div class="module clearfix"><script src="https://npmcdn.com/flickity@2/dist/flickity.pkgd.min.js"></script> <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.d703996ba6a992470f9f7fa2170736df.gz.js"></script> <link class="Webpack-css" rel="stylesheet" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.2cef3303b65f09149a6db29044f033cb.gz.css"> <!-- <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.c85a242a55150cd195e494cd6e5b9c77.gz.js" async=""></script> <link rel="stylesheet" media="all" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.bfe6eb5a8301841feef3af4e9bd1e26d.gz.css"> --> <!-- bypass --> <style> a:focus, a:hover { text-decoration: underline; 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$viewFile = '/var/www/vhosts/vcc_staging/app/View/Layouts/aarp_2023.ctp' $dataForView = array( 'content_for_layout' => '<div class="row twoColumnLayout"> <div class="col-md-8 left-rail"><div class="module clearfix"><div class="ar-basic-box"> <div> <div class="module-spacer"> <header><h1 class="article-headline">The Cost of Love: Is Helping Your Grandchild with Tuition the Right Choice?</h1></header> <div class="posted-on"> Posted on 01/29/25 by <b>Adrion Bell</b> </div> </div> <div class="module-spacer"> <span class="blog-content"><p><div class="RichTextArticleBody"> <div class="RichTextArticleBody-body"><p>You have raised your children, often footing their bills from t-ball and dance lessons to proms, car down payments, and weddings. You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. Visit the <a href="https://states.aarp.org/region/georgia/" target="_blank">AARP Georgia</a> page for more news, events, and programs affecting retirement, health care, and more.</i></p> </div> </div><div class="module clearfix"><script src="https://npmcdn.com/flickity@2/dist/flickity.pkgd.min.js"></script> <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.d703996ba6a992470f9f7fa2170736df.gz.js"></script> <link class="Webpack-css" rel="stylesheet" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.2cef3303b65f09149a6db29044f033cb.gz.css"> <!-- <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.c85a242a55150cd195e494cd6e5b9c77.gz.js" async=""></script> <link rel="stylesheet" media="all" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.bfe6eb5a8301841feef3af4e9bd1e26d.gz.css"> --> <!-- bypass --> <style> a:focus, a:hover { text-decoration: underline; 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You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. 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You have raised your children, often footing their bills from t-ball and dance lessons to proms, car down payments, and weddings. You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?
According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.
Here are a few ways to fund your grandchildren’s education:
The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.
Yet, research shows a few disadvantages associated with this generous gesture:
In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.
This story is provided by AARP Georgia. Visit the AARP Georgia page for more news, events, and programs affecting retirement, health care, and more.
Thursday, Mar 6, 2025 at 6:00 p.m. ET
George Pierce Park Community Center (Conference Room)
Suwanee, GA
Friday, Mar 7, 2025 at 6:00 p.m. ET
Dave & Buster's Lawrenceville - Sugarloaf (Meeting Room)
Lawrenceville, GA
Thursday, Mar 13, 2025 at 6:00 p.m. ET
Mountain View Community Center (Meeting Room)
Marietta, GA
This is AARP's first rate increase in 15 years.
Don't miss out, join today and save!
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$viewFile = '/var/www/vhosts/vcc_staging/app/View/Layouts/aarp_2023.ctp' $dataForView = array( 'content_for_layout' => '<div class="row twoColumnLayout"> <div class="col-md-8 left-rail"><div class="module clearfix"><div class="ar-basic-box"> <div> <div class="module-spacer"> <header><h1 class="article-headline">The Cost of Love: Is Helping Your Grandchild with Tuition the Right Choice?</h1></header> <div class="posted-on"> Posted on 01/29/25 by <b>Adrion Bell</b> </div> </div> <div class="module-spacer"> <span class="blog-content"><p><div class="RichTextArticleBody"> <div class="RichTextArticleBody-body"><p>You have raised your children, often footing their bills from t-ball and dance lessons to proms, car down payments, and weddings. You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. Visit the <a href="https://states.aarp.org/region/georgia/" target="_blank">AARP Georgia</a> page for more news, events, and programs affecting retirement, health care, and more.</i></p> </div> </div><div class="module clearfix"><script src="https://npmcdn.com/flickity@2/dist/flickity.pkgd.min.js"></script> <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.d703996ba6a992470f9f7fa2170736df.gz.js"></script> <link class="Webpack-css" rel="stylesheet" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.2cef3303b65f09149a6db29044f033cb.gz.css"> <!-- <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.c85a242a55150cd195e494cd6e5b9c77.gz.js" async=""></script> <link rel="stylesheet" media="all" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.bfe6eb5a8301841feef3af4e9bd1e26d.gz.css"> --> <!-- bypass --> <style> a:focus, a:hover { text-decoration: underline; 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You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. 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$viewFile = '/var/www/vhosts/vcc_staging/app/View/Layouts/aarp_2023.ctp' $dataForView = array( 'content_for_layout' => '<div class="row twoColumnLayout"> <div class="col-md-8 left-rail"><div class="module clearfix"><div class="ar-basic-box"> <div> <div class="module-spacer"> <header><h1 class="article-headline">The Cost of Love: Is Helping Your Grandchild with Tuition the Right Choice?</h1></header> <div class="posted-on"> Posted on 01/29/25 by <b>Adrion Bell</b> </div> </div> <div class="module-spacer"> <span class="blog-content"><p><div class="RichTextArticleBody"> <div class="RichTextArticleBody-body"><p>You have raised your children, often footing their bills from t-ball and dance lessons to proms, car down payments, and weddings. You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. 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You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. 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$viewFile = '/var/www/vhosts/vcc_staging/app/View/Layouts/aarp_2023.ctp' $dataForView = array( 'content_for_layout' => '<div class="row twoColumnLayout"> <div class="col-md-8 left-rail"><div class="module clearfix"><div class="ar-basic-box"> <div> <div class="module-spacer"> <header><h1 class="article-headline">The Cost of Love: Is Helping Your Grandchild with Tuition the Right Choice?</h1></header> <div class="posted-on"> Posted on 01/29/25 by <b>Adrion Bell</b> </div> </div> <div class="module-spacer"> <span class="blog-content"><p><div class="RichTextArticleBody"> <div class="RichTextArticleBody-body"><p>You have raised your children, often footing their bills from t-ball and dance lessons to proms, car down payments, and weddings. You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. 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You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. 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$viewFile = '/var/www/vhosts/vcc_staging/app/View/Layouts/aarp_2023.ctp' $dataForView = array( 'content_for_layout' => '<div class="row twoColumnLayout"> <div class="col-md-8 left-rail"><div class="module clearfix"><div class="ar-basic-box"> <div> <div class="module-spacer"> <header><h1 class="article-headline">The Cost of Love: Is Helping Your Grandchild with Tuition the Right Choice?</h1></header> <div class="posted-on"> Posted on 01/29/25 by <b>Adrion Bell</b> </div> </div> <div class="module-spacer"> <span class="blog-content"><p><div class="RichTextArticleBody"> <div class="RichTextArticleBody-body"><p>You have raised your children, often footing their bills from t-ball and dance lessons to proms, car down payments, and weddings. You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. Visit the <a href="https://states.aarp.org/region/georgia/" target="_blank">AARP Georgia</a> page for more news, events, and programs affecting retirement, health care, and more.</i></p> </div> </div><div class="module clearfix"><script src="https://npmcdn.com/flickity@2/dist/flickity.pkgd.min.js"></script> <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.d703996ba6a992470f9f7fa2170736df.gz.js"></script> <link class="Webpack-css" rel="stylesheet" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.2cef3303b65f09149a6db29044f033cb.gz.css"> <!-- <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.c85a242a55150cd195e494cd6e5b9c77.gz.js" async=""></script> <link rel="stylesheet" media="all" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.bfe6eb5a8301841feef3af4e9bd1e26d.gz.css"> --> <!-- bypass --> <style> a:focus, a:hover { text-decoration: underline; 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You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. 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$viewFile = '/var/www/vhosts/vcc_staging/app/View/Layouts/aarp_2023.ctp' $dataForView = array( 'content_for_layout' => '<div class="row twoColumnLayout"> <div class="col-md-8 left-rail"><div class="module clearfix"><div class="ar-basic-box"> <div> <div class="module-spacer"> <header><h1 class="article-headline">The Cost of Love: Is Helping Your Grandchild with Tuition the Right Choice?</h1></header> <div class="posted-on"> Posted on 01/29/25 by <b>Adrion Bell</b> </div> </div> <div class="module-spacer"> <span class="blog-content"><p><div class="RichTextArticleBody"> <div class="RichTextArticleBody-body"><p>You have raised your children, often footing their bills from t-ball and dance lessons to proms, car down payments, and weddings. You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. Visit the <a href="https://states.aarp.org/region/georgia/" target="_blank">AARP Georgia</a> page for more news, events, and programs affecting retirement, health care, and more.</i></p> </div> </div><div class="module clearfix"><script src="https://npmcdn.com/flickity@2/dist/flickity.pkgd.min.js"></script> <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.d703996ba6a992470f9f7fa2170736df.gz.js"></script> <link class="Webpack-css" rel="stylesheet" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.2cef3303b65f09149a6db29044f033cb.gz.css"> <!-- <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.c85a242a55150cd195e494cd6e5b9c77.gz.js" async=""></script> <link rel="stylesheet" media="all" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.bfe6eb5a8301841feef3af4e9bd1e26d.gz.css"> --> <!-- bypass --> <style> a:focus, a:hover { text-decoration: underline; 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You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. 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$viewFile = '/var/www/vhosts/vcc_staging/app/View/Layouts/aarp_2023.ctp' $dataForView = array( 'content_for_layout' => '<div class="row twoColumnLayout"> <div class="col-md-8 left-rail"><div class="module clearfix"><div class="ar-basic-box"> <div> <div class="module-spacer"> <header><h1 class="article-headline">The Cost of Love: Is Helping Your Grandchild with Tuition the Right Choice?</h1></header> <div class="posted-on"> Posted on 01/29/25 by <b>Adrion Bell</b> </div> </div> <div class="module-spacer"> <span class="blog-content"><p><div class="RichTextArticleBody"> <div class="RichTextArticleBody-body"><p>You have raised your children, often footing their bills from t-ball and dance lessons to proms, car down payments, and weddings. You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. Visit the <a href="https://states.aarp.org/region/georgia/" target="_blank">AARP Georgia</a> page for more news, events, and programs affecting retirement, health care, and more.</i></p> </div> </div><div class="module clearfix"><script src="https://npmcdn.com/flickity@2/dist/flickity.pkgd.min.js"></script> <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.d703996ba6a992470f9f7fa2170736df.gz.js"></script> <link class="Webpack-css" rel="stylesheet" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.2cef3303b65f09149a6db29044f033cb.gz.css"> <!-- <script src="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.c85a242a55150cd195e494cd6e5b9c77.gz.js" async=""></script> <link rel="stylesheet" media="all" href="https://aarp-states.brightspotcdn.com/resource/00000168-dd17-d487-a96e-df5fe3ee0000/styleguide/All.min.bfe6eb5a8301841feef3af4e9bd1e26d.gz.css"> --> <!-- bypass --> <style> a:focus, a:hover { text-decoration: underline; 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You helped fund their education nearly two decades ago and now your grandchildren are approaching college age. The tuition and matriculation costs have doubled; however, your income, especially in retirement, has not. Your heartstrings are tugged as they begin to receive college acceptance notices. Do you contribute to their college expenses or not?<br><br>According to CollegeBoard, the average annual tuition ranges from $11,610 to $30,780 depending on factors including residency. Room and board add approximately $13,310, often leading a four-year degree to command an investment of more than $100,000. There are benefits to the generous gesture of helping your college-bound grands, from passing on wealth and reducing your youngsters’ debt to tax advantages.<br><br>Here are a few ways to fund your grandchildren’s education:<br></p><ul><li>Open a 529 Plan: This offers a tax-deferred investment growth account and tax-free distributions when used to pay for qualified education expenses. Also, the new 2024-25 FAFSA (Free Application for Federal Student Aid) guidelines no longer use accounts owned by grandparents to determine a grandchild’s financial aid eligibility, nor do these accounts affect a student’s scholarships. You may also superfund a 529 plan which allows you to frontload the plan with up to five years of annual donations without incurring a gift tax. In 2025, the IRS allows individuals to gift up to $19k annually without triggering a gift tax obligation. This amount doubles for a married couple filing joint taxes. Therefore, a single grandparent can frontload a 529 with up to $95,000 and married couples can fund the 529 with up to $190,000. Georgia taxpayers may also be eligible for an income tax deduction on contributions made to 529 plans. A word of caution, some financial advisors indicate that grandparents’ ownership of a 529 plan may jeopardize their Medicaid assistance. For complete details, please consult your financial advisor or tax professional.</li><li>Pay Tuition Directly to the College/University: This method alleviates any 529 plan disadvantages and funds paid directly to the college or university for tuition are not subject to the federal government’s gift tax.</li><li>Pay the Student’s Loan: If a grandparent pays the lender directly instead of giving money to the grandchild, it will not count against the annual gift tax limit. Paying down a portion of the loan can help reduce the overall interest the grandchild has to pay and provide a better cash flow for the youngster as they enter the workforce.<br></li></ul><div class="Enhancement" > <div class="Enhancement-item"><figure class="Figure" data-alignment="left"> <img src="https://aarp-states.brightspotcdn.com/8e/2f/a4e4e8f04869a39e6f5499059835/mom-and-young-adult-daughter.jpg" alt="Mom and Young Adult Daughter.jpg" width="2121" height="1414"/> </figure> </div> </div><p>The long-term benefits of boosting a grandchild’s education are countless. It can help set them up for career success, lead to better opportunities, financial independence, and overall life satisfaction.<br>Yet, research shows a few disadvantages associated with this generous gesture:<br><br><br><br></p><ul><li>Depleting Retirement Savings: If a grandparent uses their savings or retirement to pay for tuition, it could affect their ability to fund their own retirement or other financial goals.</li><li>Possible Impact on Estate Plans: Significant tuition payments could reduce the grandparent’s estate which may impact their inheritance plans for other family members.</li><li>Restricted Fund Use: In many cases, money paid directly to the school is earmarked for tuition and cannot be used for other expenses such as dorm fees, meal plans, or textbooks.</li></ul><p>In summary, paying college tuition directly to a school, through a 529 plan, or aiding in student loan payments can be rewarding emotionally and financially and provide a great foundation for your grandchildren. However, it is wise to weigh the impact on your finances and consider all tax implications. We advise you to consult a qualified tax professional for individualized guidance and tax plans before finalizing your decisions.<br></p></div> </div> </p></span> </div> </div> <p><i>This story is provided by AARP Georgia. 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} [data-video-player][data-aspect-ratio="16x9"] { padding-bottom: 56.25% } </style> --></div><div class="module clearfix"><div class="module-spacer tout-homefit-750"> <a data-formelementid="CSN-LOCAL-HC-NEWSSK-02272024" href="/atlanta-ga/home-and-community/?intcmp=CSN-LOCAL-HC-NEWSSK-02272024"><img class="img-responsive" alt="Explore the free AARP HomeFit Guide" title="Explore the free AARP HomeFit Guide" src="https://cdn-aarp.americantowns.com/img/touts/HomeFit_750x150.png"></a> </div></div></div> <div class="col-md-4 right-rail thin-rhs"><div class="module clearfix"><!--default--> <!-- module_RHS - AARP Events --> <div class="ar-basic-box module-spacer"> <header> <div class="pull-right"> <a href="/atlanta-ga/aarp-events/" data-formelementid="LOCAL-BTN-CLK-SEEALL-EVENTS"> <img style="width:30px;" src="https://cdn-aarp.americantowns.com/img/template/icons/aarp_event_icon.png" alt="Upcoming AARP Events" /> </a> </div> <h2 class="visible-lg">AARP Events for Atlanta</h2> <h2 class="hidden-lg">AARP Events for Atlanta</h2> </header> <div class="wrap"> <div class="ar-listing snippet"> <ul class="list"> <li class="item" data-pageindex="1"> <h3 class="topic">Featured Event</h3> <h2 class="title"><a href="/aarp-event/spotting-scams-staying-safe-suwanee-ga-3625-600-pm-et-5zn8kpcld2k.html" data-formelementid="LOCAL-BTN-CLK-EVENTS-SPOTTING-SCAMS-STAYING-SAFE">Spotting Scams & Staying Safe</a></h2> <p class="time">Thursday, Mar 6, 2025 at 6:00 p.m. ET</p> <p class="venue">George Pierce Park Community Center (Conference Room)</p> <p class="loc">Suwanee, GA</p> </li><li class="item" data-pageindex="1"> <h3 class="topic">Featured Event</h3> <h2 class="title"><a href="/aarp-event/aarp-careversations-lawrenceville-ga-3725-600-pm-et-ktnq8hvgwdy.html" data-formelementid="LOCAL-BTN-CLK-EVENTS-AARP-CAREVERSATIONS-CARING-FOR-A-LOVED-ONE">AARP CAREversations: Caring for A Loved One</a></h2> <p class="time">Friday, Mar 7, 2025 at 6:00 p.m. ET</p> <p class="venue">Dave & Buster's Lawrenceville - Sugarloaf (Meeting Room)</p> <p class="loc">Lawrenceville, GA</p> </li><li class="item" data-pageindex="1"> <h3 class="topic">Featured Event</h3> <h2 class="title"><a href="/aarp-event/spotting-scams-staying-safe-marietta-ga-31325-600-pm-et-3fnck9lrjf8.html" data-formelementid="LOCAL-BTN-CLK-EVENTS-SPOTTING-SCAMS-STAYING-SAFE">Spotting Scams & Staying Safe</a></h2> <p class="time">Thursday, Mar 13, 2025 at 6:00 p.m. ET</p> <p class="venue">Mountain View Community Center (Meeting Room)</p> <p class="loc">Marietta, GA</p> </li> </ul> <p><a class="link-red" href="/atlanta-ga/aarp-events/" data-formelementid="LOCAL-BTN-CLK-SEEALL-EVENTS">View All AARP Events<i class="ml-1 fas fa-chevron-right"></i></a></p> </div> </div> </div> <div aria-hidden="true" class="aarpe-ad-wrapper"> <div class="aarpe-ad en clearfix" id="300x250_53475" data-adsize="300x250"> <script type="text/javascript"> if(typeof AARP.ads !== 'undefined'){ AARP.ads.slots({ id:'300x250_53475', size:'300x250'}); 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} </style> <div aria-hidden="true" class="aarpe-ad-wrapper"> <div class="aarpe-ad en clearfix" id="300x250_93505" data-adsize="300x250"> <script type="text/javascript"> if(typeof AARP.ads !== 'undefined'){ AARP.ads.slots({ id:'300x250_93505', size:'300x250'}); } </script> </div> </div> <div class="module-spacer text-center"> <div class="fb-page" alt="Image of AARP Georgia Facebook Page" title="Image of AARP Georgia Facebook Page" data-href="https://www.facebook.com/AARPGeorgia" data-tabs="timeline" width="" height="" data-small-header="false" data-adapt-container-width="true" data-hide-cover="false" data-show-facepile="true"> <blockquote cite="https://www.facebook.com/AARPGeorgia" class="fb-xfbml-parse-ignore"><a href="https://www.facebook.com/AARPGeorgia">Facebook</a></blockquote> </div> </div> <div class="ar-basic-box module-spacer"> <header> <h2>Contact AARP <br />in Atlanta</h2> </header> <div class="wrap"> <div class="ar-quick-list module-spacer"> <ul class="list-unstyled"> <li><i class="list-icon fa fa-envelope" alt="Email icon" title="Email icon" aria-hidden="true"></i><a href="mailto:GAAARP@aarp.org" target="_blank" rel="noopener">GAAARP@aarp.org</a></li> <li><i class="list-icon fa fa-globe" alt="Globe icon" title="Globe icon" aria-hidden="true"></i><a href="https://states.aarp.org/region/georgia/" target="_blank" rel="noopener">AARP Georgia</a></li> <li><i class="list-icon fa fa-map-marker" alt="Map Marker icon" title="Map Marker icon" aria-hidden="true"></i><a href="https://states.aarp.org/its-easy-to-contact-aarp-georgia/?intcmp=SNG-LNK-AARPLOCAL-CONTACT-20140101-ATLANTA-GA" target="_blank" rel="noopener">Contact Us</a></li> </ul> </div> <a href="https://www.facebook.com/AARPGeorgia" target="_blank" rel="noopener" aria-label="Open Facebook"><img style="max-width: 48px;" src="https://cdn-aarp.americantowns.com/img/page/icons/facebook.png" alt="Facebook icon" title="Facebook icon"></a> <a href="https://twitter.com/aarpGA" target="_blank" rel="noopener" aria-label="Open Twitter"><img style="max-width: 48px;" src="https://cdn-aarp.americantowns.com/img/page/icons/twitter.png" alt="Twitter icon" title="Twitter icon"></a> <a href="https://www.instagram.com/aarpgeorgia/" target="_blank" rel="noopener" aria-label="Open Instagram"><img style="max-width: 56px; top: 0px; left: -2px; position: relative;" src="https://cdn-aarp.americantowns.com/img/page/icons/instagram.png" alt="Instagram icon" title="Instagram icon" style="height: 49px;"></a> </div> </div> </div></div> <div class="col-md-8 left-rail left-bot"></div> <div class="col-md-4 right-rail right-bot thin-rhs"></div> </div> <div class="row oneColumnLayout"> </div> <div class="row oneColumnLayout"> <div class="col-md-12"><!-- script to activate navbar --> <script type="text/javascript"> jQuery(".channelBarMain ul.left li a").click(function() { window.location = jQuery(this).attr('href'); }); </script> </div> </div> ' $scripts_for_layout = '<title>The Cost of Love: Is Helping Your Grandchild with Tuition the Right Choice?</title> <meta name="page_title" content="The Cost of Love: Is Helping Your Grandchild with Tuition the Right Choice?"/> <meta name="robots" content="noindex, nofollow"/> <meta content="You have raised your children, often footing their bills from t-ball and dance lessons to proms, car down payments, and weddings. 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