Generally speaking, for 2009 individuals are allowed to gift $13,000 ($26,000 for married couples) per year with out incurring Gift Taxes.  A special provisions does allow a donor to contribute 5 years worth of annual gifts ($65,000) at one time to a 529 plan (Contact MTR Financial Services, LLC for more details)

The definition of qualified expenses for 529 Saving Plan account distributions may vary from state to state, but usually include tuition, fees, books, room, and board.

The definition of qualified expenses for Prepaid Tuition Plan account distributions will vary from state to state, but normally is limited to include tuition and fees only.  Room and board may be included as well; check with plan administrator for verification.

The following websites are excellent sources of additional information for college planning and savings:

General College Information

529 Plan Web Sites

www.savingforcollege.com	Overview of All States 529 Plans
www.independent529plan.org	Select Private Colleges 529 Plan
www.vanguard.com	Details on 529 Plans Serviced by Vanguard
www.tiaa-cref.org/college/	Details on 529 Plans Serviced by TIAA-CREF
www.fidelity.com	Details on 529 Plans Serviced by Fidelity
www.troweprice.com	Details on 529 Plans Serviced by T. Rowe Price
Upromise	Savings Rebate / Reward Program

Student Aid / Loans Web Sites

With all the research and paperwork that goes into college planning, it is very easy to become confused, even disoriented, with making sure the right forms are submitted at the right time to the right people.  The following timeline was provided by Tamara E. Holmes from Bankrate.com and is an excellent resource for parents of high school seniors preparing for college.

September

• Look for scholarship opportunities. Some employers offer scholarship money to children of employees. Sometimes local organizations have scholarship programs for high school seniors. Meet with your high school counselor to get information on scholarships. Check the local library and search the Internet to see if you can find other scholarship opportunities and tell everyone you know to send scholarship information your way.
• Request applications and financial-aid information from colleges you’re interested in.
• Register to take the SAT or ACT and enroll in an SAT or ACT preparation course since test scores are often among the criteria used to determine scholarship winners.
• Although it’s too early to complete a FAFSA (Free Application for Federal Student Aid) use an EFC calculator to get an early read on your eligibility for financial assistance.

October

• Attend college fairs and financial aid workshops. These might be sources of additional information about scholarships, grants and other types of financial aid.
• “Early action” or “early decision” applicants applying for financial aid usually are required by this time to complete aid applications using estimated income figures.
• Visit college campuses. Compare costs of colleges so you get an idea of how much money will be needed.
• Buy a college-planning calendar and each time you find out a scholarship or financial aid deadline, schedule it.
• Continue to contact prospective colleges and find out their deadlines for scholarship and financial aid applications, as well as any paperwork you’ll need to submit. Also, request application forms from them and schedule deadlines on your calendar.

November

• Request a PIN (personal identification number) from the Department of Education. Your PIN will significantly reduce processing time on your FAFSA.
• Work on applications for admissions, scholarships and grants.
• Complete applications for early decision programs first.
• Request transcripts and letters of recommendation, which are often needed to complete applications.
• Continue looking for additional sources of money.

December

• Start getting family financial information in order if you plan to apply for financial aid. Among the items you’ll want to gather are bank statements and records of benefits from government agencies such as the Social Security Administration.
• Make sure you get a FAFSA application from your high school counselor’s office before school closes for winter vacation. The FAFSA of course, can also be filed online. If you are planning to file online, visit the site and begin to familiarize yourself with the site and the application.

January

• Complete family taxes as early as possible because you’ll need to submit the tax return for the previous year with your FAFSA.
• As soon as tax returns have been filed, submit the FAFSA on-line.

February

• Continue filling out financial aid forms for prospective schools, as well as scholarship applications according to your deadline calendar. Though you have already filled out your FAFSA, some colleges have additional paperwork you must submit to request financial aid.
• As you submit these forms to various colleges, follow up to make sure all paperwork has been received.
• Keep looking for more scholarships. Churches, civic organizations and philanthropists could be possible sources of funding.
• Check in with a high school guidance counselor to see if more scholarship opportunities have come in.

March

• Follow up on any scholarship applications submitted in the fall if you have not yet received an award notification.
• By now you should have received your Student Aid Report (SAR), which summarizes the data you reported on your FAFSA. Check it to make sure it is accurate.
• If there are mistakes or if you have not received your SAR, contact the Federal Student Aid Information Center.

April

• Continue to follow up on scholarship and financial aid applications you’ve submitted. Look out for responses to applications in the mail.
• Look for acceptance deadlines on any scholarship or financial aid awards. The student might have to formally accept the scholarship or financial aid by a certain date.
• Compare the amount of financial aid awarded to the cost of tuition.

May

• Fill out student loan applications if loans are part of the student’s financial aid package.
• Continue following up on scholarship applications if you have not yet received notification.
• If you do receive additional scholarships, let the student’s chosen college’s financial aid office know about them. They might adjust the financial aid package that they offer accordingly.

June

• Keep looking for scholarship opportunities being awarded by local businesses and groups.
• Get a summer job to generate more money for college.

July

• Continue looking for last-minute scholarship money or look for scholarships that can be applied for in the fall to help pay for the student’s second year of college.

August

• Look for back-to-school sales to help pay for school supplies.
• Start packing.

Even if you are still a few years away from the first college tuition bill, there are a few steps you can take, some seemingly counterintuitive, to increase the chances of receiving some sort of financial aid.

About two years before your child is expected to attend college consider how you might reposition your assets so they are more favorably viewed on the applications for financial assistance.  Why start so soon?  The amount of aid you’re eligible for in a given year is based on the previous year’s income.  Controlling your assets and the receipt of income will have a significant impact on your aid eligibility.

For example, capital gains count both as an asset and income and could have a devastating impact on your eligibility.  If you are able to defer income at work, consider doing so for the years your child is in college.  Another option is to reduce your reportable assets.  It may not make sense to pay off that car loan or credit card balance when tuition bills are on the horizon, but it may actually be a wise decision.

Why?  By paying off that car or credit card you simultaneously lower your reportable assets, such as stocks and cash holdings, and increase your financial need.  Parents with $20,000 in the bank and a $10,000 credit card debt will appear to have more resources than parents with $10,000 in the bank and no credit card debt.  In the end, the parents have the same amount of money, but to the financial aid people they have less.Another strategy to increasing your aid eligibility is to pay attention to who owns what assets.  Asset ownership is critical in determining how much financial aid a student receives.  College-aid officials assess up to 35% of a student’s assets versus only 5.6% of a parent’s holdings.  Therefore, make sure your 529 Plans, Coverdell plans, etc. are in the parent’s names.  Prior to 2006, prepaid tuition plans, including the Independent 529 Plan, were considered an available resource to students and therefore had a more negative impact on financial aid eligibility than a 529 Savings Plan.  However, recent laws passed by Congress treat all 529 plans as parental assets.  Now, no more than 5.6% of your 529 college savings will be sued to assess need if you apply for financial aid under federal guidelines.

It always pays to save, but just be careful how you do it.

Federal Work-Study (FWS) provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses. The program encourages community service work and work related to the recipient’s course of study.

Participants are paid by the hour if an undergraduate. No FWS student may be paid by commission or fee. The school must pay you directly (unless you direct otherwise) and at least monthly. Wages for the program must equal at least the current federal minimum wage but might be higher, depending on the type of work done and the skills required. The amount earned cannot exceed the total FWS award. When assigning work hours, the employer or financial aid administrator will consider the award amount, the student’s class schedule, and their academic progress.

The school might have agreements with private for-profit employers for Federal Work-Study jobs. This type of job must be relevant to the student’s course of study (to the maximum extent possible). If the student is attending a career school, there might be further restrictions on the jobs you can be assigned.