Stop! Read This Before Paying for Your Grandkid’s Tuition

It’s back-to-school season, and for many grandparents, that brings one big question front and center: “How can I help my grandkids pay for college without throwing my own retirement plans off track?”

The instinct to help is admirable. But it’s easy to slide from being generous to being overextended. Tuition costs are rising, and student debt remains a national burden. Still, helping your grandkids graduate without a financial cloud doesn’t mean you need to drain your nest egg.

Here’s how to strike that delicate balance and make your money matter for your legacy and your own peace of mind.

More ways to balance your finances

Provider	Special Offer	Take Action
National Debt Relief	Be debt free in as little as 12-48 months	Get Free Consultation
American Home Shield	50% off select plans	Get Free Quote
Charlie	Get Social Security payments 3-5 days early	Sign up for free
Branded Surveys	Earn cash and gift cards for sharing opinions	Sign up to start earning
T-Mobile	5G unlimited internet for just $35 a month	Get a 15-day free trial

1. The Fine Balance: Helping vs. Overgiving

Before writing a check, take a pause. Financial planners often warn against sacrificing your own stability for someone else's future. Remember: Your grandkids can borrow for college. You can't borrow for retirement.

A better approach is to earmark a portion of your discretionary income or windfalls—like tax refunds or matured CDs—for educational gifts. Set annual limits and stick to them.

If you’re unsure how much you can safely give, use Wiser Advisor to find qualified advisors based on your needs. You'll be connected with 2–3 vetted professionals who specialize in portfolios of $100K or more.

2. 529 Plans and How They Affect Financial Aid

529 plans offer tax-free growth and penalty-free withdrawals when used for education. If the account is owned by a parent, it has minimal impact on financial aid. For grandparent-owned plans, distributions were once counted as student income. Starting in the 2024-25 school year, that’s no longer the case.

To help bridge any funding gaps, compare loan options with NerdWallet. You can explore personal loan offers up to $100,000 with no collateral and no credit score impact.

3. Smart Gifting to Avoid Tax Surprises

The IRS allows individuals to gift up to $17,000 per person per year (as of 2025) without triggering gift taxes. That means you and your spouse could jointly give a grandchild $34,000 annually toward education.

Want to make a lump sum contribution to a 529? There’s a special rule that lets you "superfund" up to five years' worth of gifts at once. This can be a smart way to front-load a grandchild's education savings.

You can also help them manage day-to-day money by unlocking cash back perks with the Walmart MoneyCard. It offers 3% cash back at Walmart.com, overdraft protection up to $200, and early direct deposit, making it a practical and rewarding option for students.

4. Use Passive Income to Fund Legacy Goals

If you want to help without disrupting your monthly budget, think passive income. For example, if you have a rental property or dividend-paying stocks, those cash flows can be directed toward college support.

Later in retirement, when preserving principal becomes more important, predictable income becomes key. That’s where reviewing and optimizing your insurance coverage can help free up cash flow.

You can shop better rates through Coverage Professor. Just select your vehicle make and the platform will compare offers from top carriers in minutes.

5. Create More Room in Your Monthly Budget

Sometimes the best way to give more is to spend less. Review your monthly bills for hidden costs or outdated rates. Even modest savings on recurring expenses can compound into meaningful contributions to a college fund over time.

And if you're looking to earn a little extra without committing to a side hustle, earn gift cards with Survey Junkie. You’ll get paid for your opinions and can cash out through PayPal or gift cards. It’s simple, flexible, and takes just a few minutes a day.

Final Thoughts: Legacy Is About More Than Money

Helping your grandkids afford college is a beautiful gift. But it doesn’t need to come at the cost of your own comfort. Teaching them financial literacy, helping them apply for scholarships, or simply sharing your story can be just as impactful.

By using smart tools, leveraging tax-friendly strategies, and setting thoughtful limits, you can support your family and protect your future.