This document summarizes a financial advisory presentation on saving and paying for a child's college education. It discusses factors to consider like the costs of different types of colleges, available financial aid options, federal and private student loans, tax benefits, and savings vehicles like 529 plans. It also addresses developing a financial plan and goal for paying for education.

1. Investment advisory products and services are made available through Ameriprise
Financial Services, Inc., a registered investment adviser.
Ameriprise Financial Services, Inc. Member FINRA and SIPC.
© 2009-2015 Ameriprise Financial, Inc. All rights reserved.
Sending your child
to college
Gerrilee Hartman
Financial Advisor
Skillrud Financial Group
A financial advisory practice of
Ameriprise Financial Services,
Inc.
May, 20th
2016

2. Why are you willing to risk the investment?
Source: Bureau of Labor and Statistics U.S. Department of Labor. USUAL WEEKLY EARNINGS OF WAGE AND SALARY
WORKERS, FOURTH QUARTER 2014. Data on chart is annualized.
$34,528
$63,648
$72,852
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
High school only Bachelor's degree only Advanced degree
Annual median income for workers over age 25
2014 (Q4)

3. Defining your goal
What investment options are available?
Which type of school will you and your child select?
How much will it cost?
How much are you willing to pay?
What sources of aid are available?

4. $3,347
$9,139
$22,958
$31,231
$7,705
$9,804
$9,804
$11,188
2-yr. public 4-yr. public
in-state
4-yr. public
out-of-state
4-yr. private
Tuition & fees Room & board Books & supplies Transportation Other
Annual cost of college by type
2014-2015 average estimated undergraduate costs
$16,325
$23,410
$37,229
$46,272
Source: Source: Trends in College Pricing. © 2014 The College Board. www.collegeboard.org

5. Are there ways to lower the cost?
• A later start
• Community college
• Living at home
• Less expensive school
• Child contributes
• State residency
• A vocational degree
• An alternate path
Consider

6. Other financial considerations
Your child does not attend college
Divorce
Blended family
Small business ownership and partners
Shared custody
Current K-12 tuition

7. How much
are you willing
to pay?

8. How much should you save?
Neither Ameriprise Financial nor its affiliates or representatives may provide tax advice. Consult your tax advisor or attorney
regarding specific tax issues.
• Timing
• Risk tolerance
• Amount needed
• Ability to save
• Taxes
Important factors

9. Federal financial aid (2013-2014)
National distribution*
Grants
$8,080
Federal
loans
$4,840
Other
$1,260
Average aid per recipient*
$14,180 Total
*Source: Trends in Student Aid. © 2014 The College Board. www.collegeboard.org
1%
6%
5%
7%
8%
21%
18%
34%
Federal
work-study
Private &
employer grants
State grants
Other federal
grant programs
Tax credits
& deductions
Institutional
grants
Pell grants
Federal loans

10. Free Application for Federal Student AidSM (FAFSA)
The federal financial aid application process
Source: Free Application for Federal Student AidSM − www.fafsa.ed.gov
FAFSA to-do list
 Find form at www.fafsa.ed.gov
 Apply
 Apply early
 Avoid mistakes
 Answer every question
 Apply annually

11. Expected Family Contribution (EFC)
The federal financial aid application process
Factors
• Your money
• Your child’s money
• Number of children
• Number of children in college
• Age of oldest parent
• Unusual family circumstances
• Unemployment
Source: Free Application for Federal Student AidSM − www.fafsa.ed.gov
Cost of attendance
– Expected family contribution
Financial need
Formula

12. Pay less than “sticker price?”
The federal financial aid application process
Source: Free Application for Federal Student AidSM − www.fafsa.ed.gov
Public
university
Private
university
Annual cost of attending $20,000 $40,000
EFC $10,000 $10,000
Financial need or aid $10,000 $30,000
FAFSA/EFC
Example — Expected Family Contribution (EFC) remains constant

13. EFC — what is included in the calculation?
The federal financial aid application process
Included in calculation
• Custodial parent & custodial
stepparent income
• Custodial parent & custodial
stepparent assets such as:
– Trusts
– Stocks, bonds, mutual funds, CDs
– Savings/checking
• Student’s income & assets including
EE savings bonds
Not included in calculation
• Income of non-custodial parent
• Scholarships
• Tax credits for educational expenses
• Home/farm equity
• Retirement plans
• Annuities
• Life insurance policies
Source: Free Application for Federal Student AidSM − www.fafsa.ed.gov
FAFSA/EFC

14. EFC — assessing the family’s assets
The federal financial aid application process
Owner
name
Savings
Assessment
rate
Expected
contribution
Kelly (Daughter) $10,000 20% $2,000
Karl (Dad) $10,000 5.6% $560
This scenario is shown for illustrative purposes only and does not represent actual clients. Actual client experiences will vary.
Source: Free Application for Federal Student AidSM − www.fafsa.ed.gov
Example — it may be better for money to be in a parent's name

15. Finding
the
money

16. Student loans
Source: Trends in Student Aid. © 2014 The College Board.www.collegeboard.org
Average 2012-2013 loan debt per borrower: $25,600
Types of loans
• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Direct PLUS Loans
• Direct Consolidation Loans
• Federal Perkins Loan Program
• Private Education Loans

17. Direct subsidized & unsubsidized loans
Terms
Subsidized loans
undergraduate
Unsubsidized loans
undergraduate
Based on financial need Yes No
Interest begins to accrue When borrower leaves school
From the day
the loan is made
Annual loan limits
(depending on grade level)
$3,500 − $7,500 $9,500 − $20,500*
Maximum total debt
(aggregate loan limits)
$23,000 $57,500
Interest rate** 4.66% 4.66%
* Less any subsidized amount received for the same period. Loan limit also depends on year in school and dependency status.
** 2014 – 2015 Academic year is July 1, 2014 – June 30, 2015
www.studentaid.ed.gov

18. Parent PLUS loans
Source: www.studentaid.ed.gov/types/loans/plus
Overview
• For parents of dependent children
• Not granted based on need
• Good credit history required
• Fixed interest rate of 7.21%
Loan limit calculation
Cost of attendance
– Other financial aid
Loan limit

19. Perkins Loans
Source: www.studentaid.ed.gov/types/loans
Overview
• Full and part-time students
• Annual limits
- Undergraduates $5,500
- Graduates $8,000
• 5% interest rate
• Income-based repayment

20. Student loan repayment benefits
Student loan interest
deduction
• Up to $2,500 deduction
Forgiveness of eligible
federal loans
• Discharges debt after 10 years of full-time
employment in certain public services
• Visit www.studentaid.ed.gov
Direct Consolidation
loan program
• Reduced monthly payments
• One lender, one monthly payment
• Varied deferment options
www.studentaid.ed.gov/types/loans

21. Grants
Gifts that generally do not have to be repaid
Source: studentaid.ed.gov
TEACH grants
Federal Supplemental Education Opportunity Grants (FSEOG)
Pell grants
State grants
Institutional grants
Iraq and Afghanistan Service grant & the Post-911 GI Bill

22. Scholarships
Where to look
 Scholarship search companies
 Internet
 School guidance office
 Employers
 Service organizations
When to look
 Child’s junior year of high school

23. This example is for illustrative purposes only and does not represent actual clients. Actual client experiences will vary.
Educational savings accounts & financial gifts
versus
Unexpected resultsGood intentions

24. Age* In 2015, the Kiddie Tax applies when the child’s:
0-17 • Investment income is over $2,100
18
• Investment income is over $2,100
• Earned income not greater than ½ of child’s total support
19-23
• Investment income is over $2,100
• Is a full-time student
• Earned income not greater than ½ of child’s total support
*Age at the end of the year
Educational savings accounts & financial gifts

25. Control of money
Tax benefits
Important
issues
Financial aid
eligibility
Educational savings accounts & financial gifts
UTMA/UGMA

26. Educational savings accounts & financial gifts
Coverdell Education Savings Accounts

27. Educational savings accounts & financial gifts
EE Savings Bonds (restrictions apply)

28. Clients should carefully consider the investment objectives, risks, charges, and expenses associated with a
529 Plan before investing. More information regarding a particular 529 Plan is available in the issuer’s official
statement, which may be obtained from an Ameriprise Financial advisor. Investors should read the 529 Plan’s
official statement carefully before investing.
Clients contributing to a 529 Plan offered by a state in which they are not a resident, should consider, before
investing, whether their, or their designated beneficiary(s) home state offers any state tax or other benefits
only available for investments in such state’s qualified tuition program.
Educational savings accounts & financial gifts
529 College Savings Plan

29. Other education tax benefits
American Opportunity
Tax Credit
• Extended through 2017
• Up to $2,500 for college expenses
• Up to 40% of the AOTC is refundable
Lifetime Learning Credit
• Up to $2,000
• Available for all years of postsecondary
education and for courses to acquire or
improve job skills
www.studentaid.ed.gov/types/loans

30. Other funding ideas
Private
industry jobs
Military
ROTC
Federal
Work-study

31. Investing your
own money

32. Bankrupting your retirement
How will financial aid be assessed?
Are you willing to quit retirement?
Are you at risk?
What if the money isn’t spent on college?
How important is retirement?
How long can you work?
Can you get a loan for retirement?
Will you become financially vulnerable?

33. Individual investments
Investment products, including shares of mutual funds, are not federally or FDIC-insured, are not deposits or obligations of, or
guaranteed by any financial institution and involve investment risks including possible loss of principal and fluctuation in value.
Certificates of deposit are FDIC-insured up to $250,000 per depositor.
Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your
investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value.
There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In
general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

34. Protecting your goal
Cash value life
insurance
Before you purchase, be sure to ask your sales representative about the insurance policy’s features, benefits and fees,
and whether the insurance is appropriate for you, based upon your financial situation and objectives.

35. Smart
spending

36. Writing your
life story
Ameriprise Financial cannot guarantee future
financial results. Client experiences may vary.

37. Ameriprise Financial
Founded in 1894.
Ameriprise Financial is America's leader in financial planning.1
More than 2 million individual, business and institutional clients.2
Ameriprise Financial has more than $800 billion in assets under management and
administration.3
Ameriprise Financial maintains leadership positions in each of its four core business
segments: Advice & Wealth Management, Asset Management, Annuities and Protection.4
Never taken a bailout.

38. The initial consultation provides an overview of financial planning concepts. You will not receive written analysis and/or recommendations.
Complimentary Initial Consultation
Beforehand, take the 3-Minute
Confident RetirementSM check
Map out your journey using the
Confident Retirement approach
Tell me about what’s important to you
Learn about how I work with clients
Determine if we’re a good match

39. Investment products, including shares of mutual funds, are not federally or FDIC-insured, are not deposits or
obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss
of principal and fluctuation in value.
The Confident Retirement approach is not a guarantee of future financial results.
Ameriprise Financial and its representatives do not provide tax or legal advice. Consult your tax advisor or attorney
regarding specific tax issues.
Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered
investment adviser.
Ameriprise Financial Services, Inc. Member FINRA and SIPC.
© 2015 Ameriprise Financial, Inc. All rights reserved.
Important information