The cost of financing a college education can be daunting to many families. Although most colleges agree that the family should be the primary support vehicle, financial assistance does exist. In addition to private sources such as trade unions, fraternal or service organizations and professional associations, there are numerous state and federal aid programs available. The good news is that a family does not have to be in a low-income bracket to qualify for many current aid programs. Most need-based programs take into account family living expenses, the number of children in the family and how many children are in college.

Federal Programs

The federal government administers several major financial assistance programs. Some are direct assistance programs; that is, the assistance goes directly to the student. Other programs are administered through the college that the student attends, funds are sent directly to the college, which in turn dispenses the money to the student in accordance with federal guidelines.

Pell, Academic Competitiveness, and National SMART Grants

The Pell Grant (formerly the Basic Educational Opportunity Grant Program) was named for Senator Claiborne Pell, who sponsored the legislation that established the program. A Pell Grant is based solely on financial need. The amount of the award is based on student need (within certain limits) and on how much money Congress appropriates to the program each year. It is important to apply for a Pell Grant even if you think you won’t qualify, since many college and state aid programs require it. Just check the proper box on the financial aid application. The Academic Competitiveness Grant (ACG) provides need-based grants for the first two years of undergraduate study to full-time students. The National Science and Mathematics Access to Retain Talent (SMART) Grant is available during the third and fourth years of undergraduate study to full-time students who are majoring in physical, life, or computer sciences, mathematics, technology, or engineering or in a foreign language determined critical to national security. These two grants are for U.S. citizens who are eligible for the federal Pell Grant, and who have successfully completed a rigorous high school program, as determined by the state or local education agency and recognized by the Secretary of Education.

Stafford Student Loans

The Stafford Student Loan (formerly the Guaranteed Student Loan) is a federally subsidized loan program that allows the student to borrow from private lenders and the government at lower interest rates. Families with high incomes are eligible for the program if certain needs tests are satisfied. The loan is insured either by the federal government or a state agency. Banks and other lending institutions voluntarily take part in the loan program. Repayment of principal and interest is deferred until six months after a student graduates or leaves school, and standard repayment is made over a 10- to 30-year period, depending upon the amount owed. An undergraduate may borrow up to certain limits each school year under the program. The government pays the interest for all undergraduate and graduate school years and for six months after the last class.

PLUS Loans for Undergraduates

PLUS loans are available to parents of dependent undergraduate students, and to graduate or professional students who reach their Stafford Loan limits. Repayment of a PLUS loan begins 60 days after parents receive the money, and lenders typically establish a repayment period of 10 to 25 years. Graduate students may defer payment while in school at least half-time.

Supplemental Education Opportunity Grant

A Supplemental Education Opportunity Grant (SEOG) is a grant to a student with demonstrated financial need. The money is sent by the federal government directly to the colleges, which determine the award amount and dispense the money to the students. (These are in addition to Pell Grants.) The Department of Education allocates a specific amount of money to each participating college. Once distributed, there are no additional sums. Applications are made through the academic institution’s office of financial aid. Early application is strongly recommended.

College Work-Study Program

The College Work-Study Program is a program administered by each participating college to provide employment for students who demonstrate financial need. The federal government grants funds to colleges for this purpose. Students normally obtain employment under this program as part of an overall financial aid package. They generally work 12 to 15 hours per week during school sessions, and up to 40 hours a week during vacation periods. Examples of college employment include library clerks, faculty aides, maintenance workers and cafeteria workers. The awards are determined by the colleges, and once a student has earned the full award amount, employment is terminated for that academic year. Application is made through the college financial aid office. Eligibility is based solely on financial need. Students must be enrolled at least half-time in an accredited college and maintain good academic standing while employed. These earnings will not reduce the student’s financial aid eligibility, however funds are limited, so apply early.

The Perkins Loan

Perkins Loans (formerly National Direct Student Loans) are administered by colleges that also act as lenders. Eligibility is based on the student’s calculated need. Although the interest rate is low, funds are limited and students should submit the financial aid application early. A student will pay no interest while still in school. There is a nine-month grace period after leaving college. Repayment is stretched out over 10 years.

State Programs

State governments also offer a variety of assistance programs. But most state assistance is available only to state residents attending schools within that state. Some states do make exceptions and permit state residents to attend out-of-state schools. A few states allow nonresidents to receive assistance while attending a school within the state or have reciprocity arrangements with other states. Many states have special programs for teachers and National Guard enlistees. Others offer work-study programs and special academic supplements. Application procedures vary from state to state. While most states allow the student to use one of the same need analysis application forms used by the federal programs, some states require separate application forms that must be completed for state programs. Students may find out about state programs and requirements through their high school guidance counselor, college financial aid office or a state agency. It is important to begin early and thoroughly investigate all potential sources of financial aid. Your child’s college placement office can be a good starting point for information on financial aid sources.

If you are a regular donor to charity, life insurance could help you to make a much larger gift to your cause of choice.1 Instead of making periodic cash contributions to a charity, you could use the same amount to pay the premium on a life insurance policy to benefit the charity. Upon your death, the charity would receive the full face value of your policy—which would likely amount to considerably more than you could afford to donate during your lifetime.

Donors Benefit, Too

In addition to enhancing charitable gifts, life insurance offers potential income, estate and gift tax benefits to donors as well. The actual benefits you realize would depend on the type of life insurance used and how the donation is structured.

Term life insurance policies are the least expensive to purchase but involve risks that may jeopardize achieving your charitable-giving goal. For instance, if the policy were to expire before your death, the charity wouldn’t receive any proceeds. Similarly, because term insurance premiums can rise dramatically over time, premiums can eventually become prohibitively expensive.

Further, if you were to become uninsurable or no longer able to afford the monthly premiums, your charity could end up with nothing. For this reason, so-called permanent policies, such as whole life, are generally more attractive for charitable-giving purposes because they typically have level premiums for the life of the contract and generally do not expire if you’ve made all of your premium obligations.

In addition, a permanent policy has a cash value component, which can increase the range of gifting strategies.

Structuring Life Insurance Gifts

There are two basic ways of using life insurance to make charitable gifts. One is to donate an existing life insurance policy. To do so, you must transfer ownership of the policy to the charity, giving up all control of the policy. Because the transfer is irrevocable, you obtain the full tax advantages of charitable giving. You may be able to take an income tax deduction equal to your basis or the policy’s fair market value, as well as a charitable deduction for the premiums you pay. The policy will not be included in your gross estate unless you die within three years of the transfer (in which case, your estate would receive an offsetting charitable deduction).

The other way to use life insurance for charitable giving is to donate a new policy. With this strategy, you purchase a policy and pay the premiums but immediately assign ownership of the policy to the charity. In this case, you would be entitled to take a charitable deduction for the premiums.

Alternatively, you may want to consider naming a charity as beneficiary of your policy. While this approach is simple and would still give you access to any cash value of the policy during your lifetime, its tax advantages are limited because you retain control over the policy until you die. Upon your death, the proceeds would be included in your gross estate, although the full amount of the proceeds payable to the charity would be deducted from your estate.

Another easy-to-execute approach is to gift a policy’s dividends to a charity. This method may be appealing if your goal is to pass the policy’s death benefit on to your heirs. You can designate a charity to receive any of a permanent policy’s dividends when you apply for a policy or at any time while you own it. While you retain control over the policy and its cash value, you also receive an income tax deduction for dividends paid to the charity. However, death benefit proceeds are included in your gross estate.

Finally, if complexity is not a concern and you are planning a substantial gift, you may want to consider using life insurance to fund a charitable remainder trust. To do this, you would want to work with an attorney to create a charitable remainder trust and then purchase life insurance to fund the trust. During your lifetime, the trust would provide you with a specified amount of income. Upon your death, the principal of the trust would pass to the designated charity. In conjunction with the charitable remainder trust, you could also purchase another life insurance policy to benefit non-charitable beneficiaries, such as your spouse and children.

Communicating the Benefits

As good as your intentions may be, don’t be surprised if your charity is not enthusiastic about receiving a gift of life insurance. It may prefer to receive a cash donation, which it can put to use right away. Indeed, if your recipient is a large charity with an investment management arm, it may decide to cash in your policy donation and invest the proceeds on the assumption that it could earn a higher rate of return than by waiting to collect the death benefit.

On the other hand, if you are donating to a smaller charity, you could point out that a life insurance gift can be preferable to alternatives, such as donating stock.2 Unlike stocks, whose value is subject to market changes, the amount the charity will eventually receive from life insurance is guaranteed as long as you continue paying the premiums.

Because state and federal tax laws are complex, it is best to discuss your situation with qualified tax and insurance professionals before deciding on the structure of a life-insurance-based giving plan.

1 – Life insurance policies are subject to substantial fees and charges. Death benefit guarantees are subject to the claims-paying ability of the issuing life insurance company. Loans will reduce the policy’s death benefit and cash surrender value, and have tax consequences if the policy lapses.

2 – Investing in stocks involves risks, including loss of principal.

This communication is not intended to be tax or legal advice and should not be treated as such. Each individual’s situation is different. You should contact your tax and/or legal professional to discuss your personal situation.

“Reading, writing, mathematics”– too bad that list doesn’t include personal finance. Most kids learn the basics of money and making change in elementary school, but probably won’t learn how to manage money unless they choose finance as a career path. That means it is up to all of us to see that our children reach adulthood prepared to face life’s fiscal challenges.

Earlier Is Better

The benefits of teaching children about money early on are both immediate and long term. In the short term, they may develop strong saving habits, learn how to make smart purchases, begin to understand the true meaning of “investment” and perhaps even learn why they can’t always get everything they want. In the long term, you can help them avoid accumulating debt. And by teaching the value of saving for the future, you can help them plan for financial security.

 Where Does Money Come From?

Even very young children can begin to understand the concept of earning money. Explain that money is earned by working, and that you can only spend what you earn. To help them understand what it is like to get paid on a schedule, begin paying an allowance. Then help them to set goals for spending and saving their money. It is important, however, to make sure that you stick to the payment schedule; otherwise the lesson may be lost.

Experts differ on whether or not allowances should be tied to household chores. Although many people say children will learn more about personal responsibility if they do not receive money for pitching in around the home, others feel paying an allowance teaches them valuable lessons about working and earning. You also might consider paying your child for “extra credit” chores that they complete outside of their daily duties, such as helping out in the garden or washing the family car.

 Make Saving Interesting

You hear it every time you enter a store with your child: “I want … Buy me this … !” Before reacting, pause and take a minute to collect your thoughts. This situation presents a great opportunity to teach another important lesson about personal finance: savings and interest.

Explain that people often save their money for items they want to buy. A simple savings lesson involves using a piggy bank, shoe box or empty peanut butter jar. Make the lesson fun by having your children decorate the “bank,” while explaining to them how you also use a real bank to save your money. Encourage your children to save a portion of their allowance for a special goal. As they save money, you might reward them with a small additional amount, just like a bank pays interest. At the end of each month, calculate how much they have saved and then chip in a certain percentage as interest.

Last, to further encourage the learning process, you might consider plotting a visual chart of their savings (include the goal) so they can easily see their savings grow. Remember to keep it as simple as possible, geared toward each child’s level of understanding.

 Banking and Investing

Once your children have been saving enough to accumulate $50 or $100, take them to the bank to open their first savings account. Most community banks will allow children to open accounts with low minimum deposits. Some even have accounts especially marketed to kids to make the learning process fun. Make sure that your children receive a passbook so they can see the progress of their savings efforts, as well as the interest that accrues.

Once they have mastered banking with an institution, you can begin to teach kids about investing. For instance, when your child wants something that he or she can’t quite afford, discuss the value of saving versus borrowing. If you do extend credit, use a written IOU, establish a repayment schedule and charge interest. By doing this, you establish the framework for teaching your children that bonds and certificates of deposit are IOUs representing loans from investors to institutions.

 Compounding

As your children get older and perhaps take on part-time jobs, their savings will likely amass at a quicker rate. Now is the time to review the lesson of compounding, or the ability of earnings to build upon themselves. Explain how compounding can be more dramatic over time; the longer money is left alone, the greater the effect. This can lead into a discussion about investing and how certain investments can have a greater ability to compound over time.

Giving a gift of stocks of well-established or kid-oriented companies can be an ideal way to teach your children about investing.1 Most children would love to think of themselves as owners of McDonald’s, Disney, or Toys “R” Us. Some companies even have shareholder meetings directed to children.

 A Little Learning Can Pay Off

Teaching your children about our complex financial system may seem daunting, but you can help put them on the right track by encouraging smart habits now.

Is it worth your time and effort? As Benjamin Franklin once said, “An investment in knowledge always pays the best interest.” Answering your children’s questions honestly and in terms they will understand may set the stage for a lifetime of smart financial moves.

 The Lesson Plan

· Ages 4 to 6 — Introduce the concept of value–how money buys things. Point out the difference between nickels, dimes and quarters.

· Ages 7 to 9 — Expand the money discussion with the notion of having short- and long-term savings goals.

· Ages 10 to 12 — Consider opening a savings account in your child’s name. By this age most kids are able to calculate interest and make a simple budget.

· Ages 13 to 15 — Discuss the difference between saving and investing. Reward avid savers with a “grown up” investment in a kid-friendly stock.1

· Ages 16+ — Get serious about checking accounts and possibly credit cards. Make sure your kids understand the difference between debit card and credit card transactions.

Investing in stocks involves risks, including loss of principal.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

This article was prepared by Wealth Management Systems Inc., and is not intended to provide specific investment advice or recommendations for any individual. Please consult me if you have any questions.

All company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Because of the possibility of human or mechanical error by Wealth Management Systems Inc., or its sources, neither Wealth Management Systems Inc., nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall Wealth Management Systems Inc. be liable for any indirect, special or consequential damages in connection with subscribers’ or others’ use of the content.

American Airlines, together with US Airways, will bring new air service to the Gerald R. Ford International Airport. American announced today it will launch service in Grand Rapids (GRR) beginning Wednesday, Sept. 3, 2014. The airline will offer nonstop flights to Charlotte/Douglas International Airport (CLT) and Philadelphia International Airport (PHL). The service will be operated as US Airways Express with CRJ-200s , 50-seat capacity aircraft.

“We are thrilled to have American, in its merger with US Airways, expand in our air service market in Grand Rapids, and we look forward to offering more choices for our travelers,” said GFIA Executive Director Brian Ryks.

“This new nonstop service to Charlotte and Philadelphia will not only connect West Michigan to two large, thriving cities, but it will also provide convenient connections to many other domestic and international destinations.”

Charlotte/Douglas International Airport offers nearly 650 daily departures to more than 140 destinations on American Airlines. Philadelphia International Airport has nearly 450 daily departures connecting to more than 120 destinations.

In addition to these two new routes, American also offers service to GRR from its hubs in Dallas/Fort Worth (DFW) and Chicago O’Hare (ORD). In February 2013, American Airlines and US Airways announced plans to merge, creating the largest airline in the world.

“As we work to fully integrate our two networks, we remain committed to expanding our domestic service to better serve our customers in small-and medium-sized markets,” said Chuck Schubert, vice president of network and schedule planning. “By building our network presence in Grand Rapids, we are providing more people in more places access to our global network covering more than 330 destinations in more than 50 countries around the world.”

Flights from Grand Rapids to Charlotte will operate twice daily departing GRR at 6:45 a.m. and 11:55 a.m. Flights from Grand Rapids to Philadelphia will also run twice daily, departing GRR at 7:00 a.m. and 3:40 p.m.

Travelers can book now for these flights operated as US Airways Express, which begin in Grand Rapids on Sept. 3, 2014.