<p>If a grandparent is going to pay whatever the shortfall is in financial aid, is there a "better" way to do this in terms of future year's financial aid?</p>
<p>We are the grandparents. S and grandS are both entering college this fall. grandS would probably qualify for some need-based aid, but parents did not get act together to file FAFSA on time. Did file it late and have had no response (in-state U). We will continue to fill the gap in future years, but would like EFC to be based on the parents' financials without our "gift" of this years COA inflating their incomes. grandS currently lives with his dad as custodial, in-state, parent. It is a FAFSA-only school and Both dad and mom are expected to cooperate in providing financial info on time for next year.</p>
<p>Tuition/room-board is about $16K/year. Does it matter whether we pay directly to school? "gift" to grandS (I assume this is the worst option)? "gift" to his mom or dad (should be no problem in them turning around and paying the tuition bill but....)? </p>
<p>Let parents take out a PLUS loan. With parents and you open a joint checking account. Have PLUS go into repayment with payment through the joint checking. Checking account to be funded by you and parents. Parents will pay their share and you will pay yours. Parents will be primary on the account through their tax ID and will get the tax deduction.</p>
<p>Same idea can work through a Stafford. Stafford would work slightly better because the interest rate is lower and kid will enjoy a credit history in repayment.</p>
<p>You can also have some control in that if kid or parents renig, then you stop making contributions to loans but they will be held responsible to that loan.</p>
<p>I think that itstoomuch has given you a great idea. First of all , you are helping them to help themselves and take ownership and your are acting as help not the main source. Remember when you file for aid, they do ask gifts,money from other sources. IF you pay then they would most likely be obligated to put you down on their FA forms which could impact what ever need base aid he would have gotten from the school.</p>