The rising cost of college tuition is a challenge for many families. With annual tuition fees ranging from $5,000 to $50,000 depending on the school costs for college can be overwhelming. On top of tuition, additional costs like books, room, and board can quickly add another $30,000 or more. For many families, covering these expenses can seem impossible, especially if the primary breadwinner is unable to work due to an injury or illness.

If a parent has received a structured settlement as a result of a personal injury, the funds can be used to pay for a child’s education. A structured settlement allows specific payments to be scheduled at certain ages, such as $35,000 each year when the child turns 18, 19, 20, and 21. These payments are directed towards college-related expenses, including tuition, books, and housing costs, ensuring that the child has the necessary financial support throughout their college years. Additionally, the funds are compounded tax-free until they are distributed, allowing for the growth of the principal amount.

The timing of structured settlement payments is an important consideration when it comes to college financial aid. Many students are eligible for financial aid, but receiving a lump sum or regular payments during their college years may reduce eligibility for need-based aid. One solution to this issue is to delay settlement payments until after the student has graduated. By doing so, the funds can be used to pay off student loans, minimizing any impact on financial aid eligibility during college.

Feel free to contact us with any questions about using structured settlement funds for college expenses.

– Parmelee Brothers