Don't Risk Retirement When Paying For College Education

"As graduation season approaches, financial planner Michael Garry often finds his advice to clients balancing retirement and college savings goals falling on deaf ears," The Chicago Tribune reports.

"Though student debt is a big problem, parents rarely consider possible income shocks like job loss that could derail both goals, said Garry, founder of Yardley Wealth Management in Newtown, Pa. His clients are mostly late-career or newly retired professionals with assets of more than $500,000.

Affluent and more modest investors alike — particularly those who are putting kids through college during the final years before or even in retirement — should keep these tips in mind: ...

Stay up on aid changes. Be aware that changes may be coming to the financial aid application process.

Legislation was introduced this month that would raise the annual income level — to $30,000 from $23,000 — that ensures maximum federal grant funding. It also would allow families to apply using earlier tax returns, so, for example, a family could submit a 2012 return for a 2014 financial aid application.

'Right now, we don't have a very well-aligned process' for submitting the Free Application for Federal Student Aid (FAFSA), said Justin Draeger, president of the National Association of Student Financial Aid Administrators, which supports the measure. Families have to scramble to file tax returns early or they have to file the FAFSA, then amend it later once the return is complete, he said.

Draeger acknowledged that using the earlier data could also increase the number of special-case applications colleges receive. A longer time period means more families with variable income, job loss or death of a breadwinner would have a very different financial picture by the time they apply.

But the key targets for financial aid, very low-income families, tend not to have highly variable income that would change the financial aid equation, Draeger said."

NASFAA's "Financial Aid in the News" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.