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Will my kids' investments cut their college aid?

February 2, 2013: 6:30 AM ET

I've opened custodial accounts to teach my kids investing. Will that cut their college aid? — Rick B., Austin

Assuming you're otherwise eligible for need-based aid, then yes. Each of your children will be expected to contribute 20% of any money in a bank or brokerage account in her name every year. In contrast, you, the parent, will have to chip in at most 5.64% of your financial assets annually. And most schools will ignore certain assets, such as your retirement accounts and the value of your primary residence, says Kal Chany, author of Paying for College Without Going Broke.

So for future investments, open a brokerage account in your name and work with your kids to choose which stocks or funds to buy. A side benefit: The setup will give your children a lesson in the intricacies of paying for college.

— Zain Asher

Got a question for the Help Desk? Send it to helpdesk@cnnmoney.com.

Posted in: Credit, Family Money
  • How can my teenager build her credit history?

    Will making my 16-year-old daughter an authorized user on my credit card build her credit history? – V. Parikh

    Yes. Using such a "credit card with training wheels," says credit expert John Ulzheimer, is the best and most common way for a young person to build credit. The big three reporting agencies will start a file on her — either right away or when she turns 17 (policies vary). FICO, the leading MORE

    Jan 26, 2013 6:30 AM ET
    Posted in: Credit, Family Money
  • Are heirs responsible for credit card debts?

    My elderly mother-in-law has several credit cards, two of which are being used by her granddaughters. The minimum is paid each month, but never the full balance. Will my wife, who will be the sole survivor of my mother-in-law's very small estate, be responsible for the credit card balances? — Craig P.

    As an heir, your wife will not be liable for any outstanding credit card debt in the estate. But MORE

    Dec 20, 2012 6:30 AM ET
    Posted in: Credit, Family Money
  • Are credit-card-linked discounts worth the privacy risk?

    Are discounts linked to my credit card spending worth the privacy risk? — Michael, West Bloomfield, Mich.

    Both online and off, your purchases often factor into the discounts you're offered. Buy baby food at the grocery store, for example, and you might get a coupon for diapers along with your receipt.

    Companies such as FreeMonee and MyLinkables can offer you deals based on your past credit card spending. Details vary, but each has MORE

    Nov 22, 2012 6:30 AM ET
    Posted in: Credit, Family Money
  • If Dad files for bankruptcy, can creditors come after Mom?

    My father signed a five-year commercial lease in New Jersey for a business that is not running well. There are two years left on the lease, and he owes close to $40,000 on various business credit cards. If my father declares bankruptcy for the business, can the landlord and credit card agencies come after my mother, who holds a steady job and has a regular income? — K.S.

    As long as MORE

    Nov 14, 2012 6:30 AM ET
    Posted in: Credit, Family Money
  • How can you refinance an underwater mortgage?

    I am trying to find a program that will help me refinance my home loan. I owe more than the house is worth. I have never been late on a payment and my credit score is really good. My current rate is 8% and no one will seem to refinance it for me. Is there any hope? — Jeff D.

    Step one is to figure out what type of loan you MORE

    Nov 9, 2012 6:30 AM ET
    Posted in: Credit, Real Estate
  • Equifax, Experian, TransUnion…and Innovis?

    Is there a fourth consumer reporting agency called Innovis? — Barbara S.

    When we think of consumer reporting agencies, we tend to focus on the "Big Three" nationwide agencies: Equifax, Experian, and TransUnion. Innovis has been an affiliate of the privately held CBC Companies since 1999, and is sometimes known as the fourth national credit reporting agency.

    There are a number of entities that trade in consumer information, and no comprehensive list MORE

    Oct 2, 2012 6:30 AM ET
    Posted in: Credit, Family Money
  • Are 401(k) loans taxed?

    If I borrow from my 401(k), do repayments come out of after-tax or pre-tax dollars? If they come from after-tax dollars, is the money taxed when withdrawn a second time? — Joe C.

    Your repayment of a 401(k) loan does come from after-tax dollars, and when you eventually withdraw those funds in retirement, they will be taxable as regular income. But this doesn't represent a second round of taxes. That's because MORE

    Oct 1, 2012 6:30 AM ET
    Posted in: Credit, Retirement, Taxes
  • Am I eligible for student loan forgiveness?

    I'm a public school teacher with a large student loan balance, and I have been working for 12 years. I've read that after 10 years of full-time work, any remaining student loan debt would be forgiven. How do I find out if I'm eligible? I'm not sure if I have a federal or private loan, but I'm making payments to American Education Services in Harrisburg, Penn. — Michelle M.

    Your first MORE

    Sep 25, 2012 6:30 AM ET
    Posted in: Credit, Family Money
  • Which to tackle first: car loan or student loan?

    I have an auto loan (a balance of $22,000 with an interest rate of 2.69%) and a student loan ($6,500 at a 3% rate). If I put extra money each month towards one of these loans, which should it be? — Andrea V.

    On a purely mathematical basis, you're better off focusing your efforts on first paying off the loan with the highest interest rate. Over time, that strategy will save MORE

    Sep 24, 2012 6:30 AM ET
    Posted in: Credit, Family Money
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