Military Officer - November 2006 - (Page 69)

far more heavily than funds in the parents’ name (35 percent versus 5.6 percent, though starting in the 2007-08 school year, the child asset percentage will drop to 20 percent). The EFC rises rapidly with parental income and falls rapidly if more than one family member is attending school at the same time. “EFC Expectations,” page 67, illustrates the approximate EFC for a family of four with one or two children in college at various income and savings level. (For simplicity, no child assets or income are assumed.) Financial aid typically comes in one of three forms: ■ Grants, which do not have to be repaid, typically are awarded to those with extraordinary ﬁnancial need. ■ Campus-based aid includes Fed- eral Supplemental Educational Opportunity Grants (FSEOG), Federal Work-Study (FWS) programs, and the need-based Perkins low-interest loans. These programs are administered at the school level. ■ Loans include subsidized Stafford Loans, unsubsidized Stafford Loans, PLUS loans, [CONTINUES ON PAGE 83] Income Limitations? No, all savers are eligible to use Effect on College Aid? Minimal Use Limitations? Qualified education expenses include tuition, room and board, fees, and books for post-secondary undergraduate, graduate, and vocational education. There is a 10-percent penalty if funds are not used for education Transferable? The benefit can be moved between beneficiaries No, all savers are eligible to use Minimal Typically only covers tuition and fees (room and board, books, and incidental expenses often are not covered) Same as Section 529 College Savings Plan, plus funds can be used for elementary and secondary education Can be used for educational and noneducational expenses The benefit can be moved between beneficiaries Yes, phase-out between modified AGI limit of $95,000 to $110,000 for single filers (double for married) No Minimal May be transferred only upon the primary beneficiary’s death Yes. Considered a child asset and subject to the 35 percent assessment rate (dropping to 20 percent as of the 20072008 school year) Minimal No No Same as Section 529 College Savings Plan. No 10-percent penalty for noneducation use No NOVEMBER 2006 MILITARY OFFICER 69

Table of Contents Feed for the Digital Edition of Military Officer - November 2006

From the Editor From the President Your Views MOAA Directory Rapid Fire Washington Scene Financial Forum Ask the Doctor Chapter Activities Cover Story: Financial Guidebook Got (the right) Insurance? A Penny Saved, a Degree Earned The “Y” MOAA Scholarship Recipients Pages of History Information Exchange Member Books MOAA Scholarship Donors MOAA Member Services Advertising Index MOAA Calendar Sounding Taps Encore

Military Officer - November 2006

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