EDUCATION PLANNING

"I would love to do something for my grandchildren so they can afford a good college education, but how?" asked Peter Livingston and his wife, Penny. They had seen the cost of college escalating while their own children were trying to get their feet on the ground with mortgages, paying off their own college loans, and the costs of raising the kids. They had recently sold Peter’s manufacturing business and wanted to use some of that money to start a college fund for the grandchildren. They knew enough about the process, having educated their own three,but were the rules still the same now? Do they gift the money to the children or to the grandchildren? Can they pay the tuition bills directly? Should they take advantage of these popular state programs and buy tuition "credits"? What about the new "529" plans? Would their gifts disqualify the grandchildren for financial aid? Is it a good idea to pay for the education, or should the grandkids share in the cost of it?