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Even though it’s only February, college financial aid officers are already gathering documents, crunching numbers and otherwise working to determine grants for the school year that starts this coming fall. If you have children you plan on sending to college, how will your own savings and investments affect their chances of getting financial aid?
The answer depends not only on how much money you have, but also where you keep it. Most colleges base their aid calculations on the Free Application for Federal Student Aid (FAFSA), which currently counts up to 5.64 percent of certain parent-owned assets in determining federal or state aid. By contrast, FAFSA counts up to 20 percent of a child’s assets, such as an UGMA or UTMA account.
So, what parent-owned assets are counted when determining a student’s need for financial aid? They include savings and checking accounts, non-retirement investment accounts and other types of assets. You do not have to report retirement accounts — such as traditional or Roth IRAs, 401(k)s and pensions — on the FAFSA. However, if you start taking withdrawals from these accounts, the withdrawals must be reported on the FAFSA as student income for the year in which the transactions occurred — which means these withdrawals could affect your child’s financial aid package the following year.
A 529 plan, is one popular college-savings vehicle. If you own a 529plan, you will need to report it on FAFSA as a parent-owned asset. But when you take withdrawals from the 529 plan, they won’t be counted as parent or student income on FAFSA, and they won’t incur federal income taxes, provided the money is used for qualified higher education expenses. (If you don’t use the money for these expenses, you’ll be taxed and potentially penalized by 10% on the earnings.) Because a 529 plan is counted as a parental asset on FAFSA, some people ask grandparents to own a 529 plan. But while the value of an intact grandparent-controlled 529 plan will be excluded from FAFSA, the withdrawals themselves will be counted as untaxed income to the student on the following year’s FAFSA, and this money could certainly affect aid decisions.
At least a year before your first child heads off to college, you may want to contact the financial aid office at a local school to ask questions about FAFSA, scholarships, loans and other aspects of assistance. Since most colleges and universities follow similar rules regarding financial aid, you should be able to get some helpful answers, no matter where your child goes to school.
Of course, even with careful planning, your student may not qualify for financial aid. If this is the case, you will need to consider other strategies for paying for college. But keep this in mind: It’s best to develop a savings strategy for both college savings and one’s own retirement goals. So, study the financial aid rules, consider investing in college-funding vehicles such as 529 plans and do whatever else you can to help get your kids through school, but don’t forget about your own needs — because they are important, too.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
After months in the planning, work on the long-awaited Paris Lakes Development is under way along Paris’ southeast loop.
Work has begun on laying 2,000 feet of a forced main sewer pipe that will connect the site to City of Paris lines across the loop, near Covenant Christian Church. Sewage from the site will have to be pumped uphill to connect with the city lines, since the gravity flow is in the opposite direction.
“Paris Lakes Development has broken ground and headed that-a-way. We’ve basically started construction,” developer Ron Parker told eParisExtra on Thursday.
“We’re getting the boring done under the loop and getting it over to our property. As soon as we get the final stuff done, we’ll know right where to take it to, and we’ll take it to our lift station,” Parker said.
Centerpiece of the development will be a four-story, 130-bed, state-of-the-art, full acute care trauma hospital with more than $30 million worth of new equipment.
Adjacent to the hospital will be a rustic shopping center that will feature “the stone and the hardy plank and the beams and timbers of the look of the 20′s and 30′s and 40′s.” The shopping mall will have a clock tower visible to people traveling on Loop 286.
It will take “another two weeks” to complete laying the line extending City of Paris sewer infrastructure to the site, Parker said.
Construction of the hospital and shopping center could keep 1,000 or more construction workers busy for two to three years, Parker said when he first unveiled plans for the hospital and shopping center site on July 1, 2012, in an article on eParisExtra.
The hospital itself is expected to employ at least 650 permanent employees.
By Charles Richards, eParisExtra
Digital Mammography of Northeast Texas has been awarded a certificate of excellence from the Texas Department of State Health Services in the Mammography Quality Standards Act (MQSA). Every year since 2006, when they first started seeing patients, Digital Mammography has received 100% rating on the MQSA re-certification. This certificate is only awarded to those facilities that are clearly above average and have not received any health related violations throughout the year.
In addition, Digital Mammography of Northeast Texas has also been awarded ACR accreditation from the American College of Radiology. By awarding this facility accreditation, the ACR recognizes Digital Mammography of Northeast Texas as a breast imaging center offering women the highest quality mammography services.
A minor kitchen fire erupted at Time Flies — 25 N. Main Street — on Friday just before 4 p.m., resulting in the closing of the kitchen, but according to bar management, it would reopen on Friday night.
Although they were unable to serve while the kitchen was closed, the bar stayed open and served drinks while the fire damage was cleaned.
Some plastic bags on an oven in the kitchen led to the minor fire, which resulted in heavy smoke damage. No one was injured.
The flames damaged some electrical cords, and the fire marshal had the establishment go through some precautionary safety measures, but cleared them to continue business.
City Clerk Janice Ellis today released the names of a citizens advisory committee, appointed by Mayor AJ Hashmi — whose job it will be to propose a smoking ban, or not, for the city of Paris.
It will be a 12-person committee, including the mayor and District 6 city councilwoman Cleonne Drake, whose jobs will be more to moderate the proceedings rather than to take part in the proceedings.
Five of the 10 citizen members were selected because they have expressed support of a smoking ban in the city.
The other five members were selected because they expressed opposition to a smoking ban.
Committee appointees (with stance for or against a smoking ban in parentheses) are:
Whether to adopt a smoking ban was on the council agenda on Monday, but the council decided to give a bipartisan citizens committee a say.
At Monday’s meeting, for almost an hour, the council listened as 40 individuals walked to the podium and expressed their opinion for or against a no smoking ordinance that would allow smokers to light up basically only in the privacy of their own residence or vehicle. Or perhaps outside, if far enough away from an entrance that non-smokers wouldn’t be subjected to second-hand smoke.
Committee members were selected from a group of about 20 citizens who expressed to Ellis after Monday’s meeting their desire to be on the committee.
It appeared all of those for a ban were non-smokers. At least half of those against a ban said they were non-smokers, but oppose private business being told they can’t allow smoking on their premises; if someone doesn’t want to be around smokers, take their business elsewhere was their general argument.
A number of people also complained that e-cigarettes should not be included in a smoking ban.
The committee’s ultimate conclusion will be passed along to the council. If the committee is unable to decide, the issue will go back to the council to decide.
The council itself — comprised entirely of non-smokers –appears split 6-1 for a more restrictive smoking ban, with District 5 councilman Matt Frierson alone in opposing a ban.
They were split down the middle — half of them adamant about the dangers of second-hand smoke and half of them insistent upon it being a business owner’s right to allow smoking.
It appeared that all of those speaking out for a ban on smoking were non-smokers, and that at least half of those opposing a smoking ban were also non-smokers but in opposition to government at any level imposing more regulations on restaurants, bars or other private business.
During two recent council meetings where citizens spoke about a smoking ban, some were more vocal and animated than others, Hashmi said. At least one person who was vehemently for and one who was vehemently against was included on the committee, the mayor said.
Three of the members own bars or restaurants — two that allow smoking and one that does not.
Kruntorad was the first one to come to the podium during a citizens forum on Jan. 13, saying he is a non-smoker but feels it should be up to a business owner to decide whether to allow smoking. Non-smokers can simply decide to take their business elsewhere, Kruntorad said.
Hashmi said he will not rush the committee.
“Smoking has gone on for years and years, and all of a sudden it is bad and we have to stop it immediately? What’s the big rush? Give it some time,” Hashmi said.
“I want the committee to unanimously come to a conclusion on what they want,” the mayor said. “I am confident that common sense will prevail.”
By Charles Richards, eParisExtra