How much should I help?

Gifting vs. Loaning: Decision tree

There are numerous ways to financially “help” children. Sometimes parents help more by giving and other times by withholding or limiting funds. A way to consider their use of your college-saving money is by gifting a certain set amount, then loaning additional amounts needed at low interest (see Note below on the Applicable Federal Rate). Another method would be to gift a smaller amount, observe how the student/beneficiary spends this, then increase your gift each year they satisfy your spending criteria (make sure instructions and desires are clear).

Before college or trade school begins, it is wise for owners to personally decide how much financial aid they can and will support. Discussion with the upcoming student is important to set expectations.