I purchased bonds years ago and they were not registered correctly so that my child cld use them for college. I was given wrong info by my employer. They are in my name and daughters. She currently has student loans , makes 59k a year. Shld she cash in to pay her loans? Do u see any positive future changes for bonds where she cld avoid reporting the interest?
I am retired who higher income. Any better options if I cash in?
I invested a lot and feel I was mislead about use.
Any suggestions elf be appreciated. Thank you !
Terry Says: That is a real shame. The bonds must have been purchased in the PARENT’S name in order to be cashed in tax-free for payment of college tuition and some expenses. And if your child was listed as a beneficiary instead of a co-owner you could have used them for that purpose — if you met the income qualifications. It’s too late for that now. They couldn’t be used in any case to repay student loans.
So now you are left with the question of whether to cash the bonds in now — or whether they are still such a good investment (having an older, higher floor rate) that you would be better off gifting some other money (currently earning less interest in a CD) and letting the bonds continue to grow. Go to www.SavingsBonds.com for a valuation and “cash-in” report so you don’t make a mistake. And since your daughter now is earning money, go to www.SOFI.com to see if she can refinance those loans down to a lower rate to make them more manageable — while you perhaps gift her some money each year to pay down the balance of the loans.