Soaring Tuition Raises The Importance Of Stock Grants & Nonqualified Deferred Comp For College Funding

The price of higher education has never been, well, higher. Some private colleges now cost up to $60,000 per year; even at state universities, annual tuition can approach $30,000 for students who aren't state residents. This means smart financial and tax planning for college funding has become more important than ever. However, surprisingly little has been written about paying for college expenses through the use of stock grants and nonqualified deferred compensation (NQDC).

For the millions of US employees who have stock grants or NQDC from their companies, expert guidance on college funding is available in articles written by Troy Onink, a noted college-funding authority and Forbes blogger. Tailored for each website, his article series at myStockOptions.com and myNQDC.com explain the issues and planning involved in using these forms of compensation to meet the costs of university tuition.

On myStockOptions.com, the three-part series Funding Your Child's College Education With Stock Options And Other Stock Grants explains:

• the impact of equity awards on financial aid eligibility
• the basics of gift tax and the tax treatment of stock compensation in the financial planning for higher education
• methods to minimize capital gains at sale, planning for the kiddie tax and education tax credits, and strategies that students can use

Meanwhile, myNQDC.com has the two-part series College Financial Aid & Funding With Nonqualified Deferred Compensation. Contributions to NQDC plans allow participants to defer income to future years and defer taxes on that income until they receive it at the scheduled distribution date(s). Therefore NQDC often has long-term planning considerations. For many NQDC recipients, the expense of their children's higher education, even if it is many years away, can be one of the most important goals for NQDC deferrals. In his NQDC articles, Troy explains:

• NQDC in the context of eligibility for need-based financial aid
• the ways in which NQDC income deferrals and distributions by parents affect a student's eligibility for financial aid
• impact of NQDC on eligibility for the American Opportunity Tax Credit
• financial-planning strategies with NQDC that can help your cash flow for meeting college expenses

For a range of planning ideas with stock comp and NQDC, see the Financial Planning sections of myStockOptions.com and myNQDC.com.