That might be a good idea fo income tax purposes. But not for qualifying for college financial aid. The biggest mistake that families make when planning for college is having money in the student's name. The problem is that 20% of a student's assets are assessed for the Expected Family Contribution (EFC), while only 5.65% of the parents' assets are assessed. The resulting increased assessment at the student rate would certainly negate any tax savings.

Asset Contributions

Parent's

$10,000 x 5.65%

Student's

$10,000 x 20%

$2,000 assessment

In the above example, having money in the student's name results in a nearly $1,500 reduction in potential financial aid - a significant loss. Multiply that over four years and you are potentially missing out on $6,000 of college aid!