by Claudia Tietze

Created on: October 24, 2008

The best way to plan and calculate education costs is to educate yourself. Don't just look at the price tag of different colleges that you think your child may want to go to, but start preparing when your child is in 8th grade or a freshman in high school. Yes. You heard correctly. That isn't to say you shouldn't save up to that point, but this is the time when you may have to move some investments around and set the groundwork to maximize your dollars.

Here are the facts. The price of an education will continue to go up. There will always be financial aid. The more financial aid colleges get, the higher their tuition costs go because they know that a certain amount of financial aid from government sources will cover the difference. Sad, but true.

Your best bet for affording, planning and calculating for your child's education isn't necessarily what you would think it might be. Your best bet is to help your child get the best possible financial package they can. For example, some investments count against you when filing for financial aid, while others do not. It is not cheating or getting out of paying anything if you educate yourself as to what these investments are. For example, you have a rental home or a second vacation home. These will count against you, however, if you put these properties in the name of a trust, they do not.

Also, if you are divorced, the main household income is used. This means if your ex makes more money than you, but you have supplied the largest portion of "roof over head time", clothes and food, then your household income counts. If you re-marry, both incomes will be used to calculate the parents responsibility towards the education of your child.

When you fill out the FASFA, which is the form everyone has to fill out for financial aid, the form does not explain the ins and outs of what they really want or what you need to put down. Often even the financial counselors at the colleges do not explain the simplest of things to you. I suggest investing in a good book or even hiring an organization to fill out this form on your behalf. For example, it asks what your income is. Most people assume this is pre-tax income, but what they want is your income after all your tax write offs. This is extremely important, particularly if you are self employed, because the more itemization you can do on your taxes, the lower your income looks on the FASFA.

The best investment you can make is in your child. Good grades alone do not get you the best

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