Are parents penalized for saving money for their child's college education?

No. Actually, those families that have saved for college may not have to borrow as much in student and/or parent loans. Although parents' savings and investments are taken into consideration when determining how much aid a student may be eligible for, only a small percentage of the parents' assets are used in the calculation.

However, more of a contribution may be expected from the student's savings and investments because the student is the direct beneficiary of the college education. More.

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