BOSTON (CBS) – If your kid is a senior this year and there is nothing set aside for a college education it’s too late to do much more than stick whatever extra cash you can in a savings account.

Colleges will look at your assets and your income to determine Financial Aid. Aid consists of grants, which do not have to be repaid, loans, or work-study programs. If your income is over $80,000 it will be tough to qualify for grants unless you have more than one child attending college.

Work-study programs are good for the kids for they will need to learn to manage their time studying, working, and playing. Which may be a key lesson in college.

College sponsored loan programs usually require payments to start in September of freshmen year. There are several federal loan programs, the Perkins loan, Stafford loans and there is the PLUS, Parent Loans for Undergraduate Students.

Start your search with the Massachusetts Educational Financing Authority’s website.

You could consider using some of the equity in your home if you have any. I am not a big fan of using your home as a revolving bank account. Look to refinancing or taking out a home equity line of credit. The interest becomes deductible even if you use the money for college expenses.

Last resort; your retirement assets. You may be able to borrow from your retirement plan at work. If you lose your job the loan will need to be paid back immediately or it is considered a withdrawal and if you are under 59½ a 10% penalty and taxes will be due.

You can also tap into your IRA. But once the money is withdrawn there is no putting it back, for the government considers it a withdrawal. No penalty if used for college but taxes will be due.

If you have a Roth IRA you can tap into the contributions you made to it and because you have already paid taxes on the money you will not incur any more.

One more thing: Upromise. They have a rebate program and you register your credit cards and grocery cards to earn money for college! Over the last seven years, I have earned over $800 for my granddaughter’s 529 plan.


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