How Savings Bonds Could Impact College Financial Aid Eligibility

U.S. savings bonds and notes come in several varieties and denominations. With regard to college funding, Financial Aid Officer (FAO)s view these as assets. Just as important is the FAO's perception of the interest that accrues on your assets, Kalman Chaney, best selling author of "Paying for College Without Going Broke" says "nothing prompts a "validation" (financial aid jargon for an audit) faster than listing interest and dividend income without listing the assets it came from."

This is not to say that interest is not good. Au contraire, do not stuff your money in the mattress. This interest is your only hope of keeping up with inflation and rapidly rising college costs.

So what is a parent to do? I always stress competent planning. When dealing with Series E and EE U.S. Savings Bonds, the investor has two options: he can report interest on the bond as its earned each year, or it can be reported in one lump sum the year he cashes the bond.

The second option allows the investor to hold the bond while accruing interest for years. He'll never pay interest until the year he finally cashes in. In terms of college planning, that had better not be a base income year. That would definitely raise your EFC.

There are exceptions made for certain Series EE bonds bought after 1989. The government give tax breaks to low and middle income parents who purchased the bond specifically for college funding purposes. As of 2011 tax rates, this benefit applied fully to single parents making up to $71,000 and couples making up to $106,650; partially to any single parent making under $86,100 or couple making less than $136,650.

We still recommend that families cash these bonds after the student's final base income year (after Jan 1 of the Junior year). Taxed or untaxed, the FAOs still consider the interest as income and assess it with the same methodology as your income.

Typically the investor has options to avoid cashing bonds in a base income year. E and EE bonds can sometimes be rolled over into H or HH bonds. No law says bonds must be cashed upon maturation. In many cases, the bond will be held and accrue interest beyond its face value.

In any case the scenario should be discussed with a qualified college funding counselor. Only professionals can assess holistically which move makes the most sense in any given situation.

To take savvy steps to increase your chances of receiving aid regardless of income, while implementing long and short term strategies to lower college costs or comparing and negotiating aid offers as well as to avoid costly but routine mistakes, visit http://eapen.com/, a network of critically acclaimed experts in college admissions and financial planning.

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Historic Changes in the Dollar and Their Impact On Your Finances Today

Over the past 100 years there have been a lot of changes when it comes to the U.S. dollar. Unfortunately most of these changes have been for the worse from the standpoint of our well-being as average citizens.

In the old days our grandparents and their parents were used to conducting transactions using gold and silver coins as well as paper representative money substitutes such as silver certificates. If you are not familiar with silver or gold certificates they are merely notes that look very much like our modern 1, 5 and 20 dollar bills but the difference was that if you took them to the Treasury you could exchange them for a set weight of gold or silver.

The reason people trusted these paper substitutes in the first place was because you could exchange them for real money made of precious metals. Today we simply trust the dollar and the government that issues it more out of habit than out of any real value behind the currency.

The end for the dollar to gold exchange standard came for the average American in the year 1933 when the President at the time -FDR- mandated that all gold currency be called out of circulation and paper money replace it entirely. This was fairly easy to accomplish since people were already used to dealing in paper currency however it was a fateful step since the American people could no longer hold the government accountable for excessive inflation by turning their paper currency in for physical gold.

Foreign countries were able to continue exchanging dollars for gold up until 1971 when Nixon ended that practice. Silver currency stuck around a bit longer than gold since the last silver coins are marked 1964. Silver certificates stopped being exchanged for physical silver in 1968 and since that time it has been up to the individual to accumulate precious metals as savings on their own.

Today it seems quite important to revive interest in precious metals and currencies backed by precious metals. The Federal Reserve has created so many new dollar units that the value of our currency has fallen significantly and continues to do so. If you want to protect the savings you have in the bank from further devaluation you will have to take action since the rate of inflation is outpacing the rate of interest you receive on deposits.

To beat inflation you will have to invest or speculate in some way. One way is to buy safe stocks that pay good dividends. Oil companies are an example of this type of stock. You can also look into buying physical silver and gold in the form of coins or bullion. You can then store your metals in a safe place and track the trends in the price appreciation and inflation rates to determine when you should sell and move back into cash. This will likely be when the real rate of interest you can get on money in the bank returns to positive territory.

Would you like to read more about the history of our money and what silver certificates are worth? You can find out more through the posts at the Silver Certificate Value blog.

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