Pure’s Senior Financial Advisor, Matt Balderson, CFP®, AIF®, reviews strategies that families with college-bound children leverage to reduce the cost of higher education.
Transcript
If you have a child or grandchild heading toward college, you already know tuition costs are no joke. But how much you actually pay has a lot to do with timing, strategy, and a few moves most families have never heard of. Let’s walk through some of the smartest ways to fund college without overpaying.
The first is being smart about timing. One of the most overlooked pieces of the puzzle is the FAFSA base year — the tax year two years before your student starts college. This is a critical year because the financial aid formula for the current year you’re applying for is based on income from 2 years prior. Decisions like when you sell investments, take a distribution, or do a Roth conversion can actually affect how much aid you qualify for. Planning around that window in advance can make a real difference.
The next way you can keep from overpaying on college is by being highly strategic with how you take advantage of financial tools. For example, 529 plans are still one of the best tools out there, but a few things are worth knowing. Many states offer a tax deduction for contributions, so where you open the account matters. There’s also a strategy called superfunding — where you front-load five years of contributions in one lump sum — which gets that money growing tax-free right away.1 And thanks to SECURE 2.0, unused 529 funds can now be rolled into a Roth IRA for the beneficiary, which takes a lot of the pressure off worrying about over-saving.1
The last strategy is one that should be used by everyone watching this video. A lot of families assume they won’t qualify for aid and never apply. That’s a costly mistake. Always file the FAFSA — the formula considers more than just income, and you might be surprised. Also know the difference between need-based and merit aid. Merit scholarships don’t require financial need at all, and some private schools end up being more affordable than state schools because of them. And if you receive an aid offer, you can negotiate — especially if you have a competing offer from a similar school.
The families that come out ahead on college costs are usually the ones who plan early. If you have a college-bound child or grandchild who is considering applying to schools in a year or two, take a moment to download our Key College Funding Data Guide for more information about what to consider and how to start your roadmap to affording college.
If you are already narrowing in on schools, signing up for exams, or submitting applications and want to ensure the cost of a degree won’t derail your own financial plan, then you’re in the right place. Take advantage of our free financial assessment and we’ll walk you through your full financial picture and help you create a plan for protecting your savings while making smart moves for the next generation. Reach out today to get started on a financial plan that works for your whole family.
Sources:
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“Superfunding a 529 plan: How it could benefit your estate.” June 5, 2026. https://investor.vanguard.com/investor-resources-education/article/superfunding-a-529-plan.
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IMPORTANT DISCLOSURES:
- Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.
- Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.
- Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
- Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
- All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
- Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
CFP® – The CERTIFIED FINANCIAL PLANNER® certification is by the CFP Board of Standards, Inc. To attain the right to use the CFP® mark, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. 30 hours of continuing education is required every 2 years to maintain the certification.
AIF® – The AIF® designation, administered by the Center for Fiduciary Studies fi360, certifies that the recipient has specialized knowledge of fiduciary standards of care and their application to the investment management process. To receive the AIF Designation, the individual must meet prerequisite criteria based on a combination of education, relevant industry experience, and/or ongoing professional development, complete a training program, successfully pass a comprehensive, closed-book final examination under the supervision of a proctor and agree to abide by the Code of Ethics and Conduct Standards. Six hours of continuing education is required annually to maintain the designation.
