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"Advice on preparing for children's college education"
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Generally, the FAFSA (Free Application for Federal Student Aid) is the starting point for financial aid. The latest (simplified) FAFSA form does not ask for assets although it says that you could be asked for them later. All previous FAFSA forms specifically list what is considered an asset and what is not. See p. 5 of the 2009-2010 FAFSA form. Three things are listed as NOT being an asset -- the home you life in, life insurance, and retirement plans. Therefore, your 401(k), 403(b), and IRA do NOT count as assets. Your annuity (qualified or non-qualfied) also does not count. You did not mention your age, but the older you are, the more savings you can have which are exempt from increasing your EFC (Expected Family Contribution) which decreases your financial aid. Look online, and I'm sure you can find a free EFC calculator which will help you estimate your EFC. Cost of college - EFC = financial aid need. IF the college wants your daughter, they will come up with the financial aid. In my experience, private schools have more endowments and more financial aid making it often more affordable to go to a private college than a state school.
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I have saved a great deal of money over the years to buy a house. This was quite hard as I am a single parent. In four years my daughter will be off to college. I have been told I should buy a house now or i will reduce my chance of receiving a financial scholarship for my daughter in four years. I only have about 75,000.00 in a combined 401K (old job) and annuity (from divorce). My job is steady however it is contractual. Becuase it is contractual I am able to only contribute 7% of my incomne to a 403. I also have a IRA in 5,000.00. How can I either increase funds for retirement dramatically or should I buy a house. I might add that my city has an incentive of 20,000.00 to purchase a home in the city.