The American Academy of Financial Management™ Journal

Volume 6 - Spring 2005

International Assigned ISBN(0-9749946-0-X)The American Academy of Financial Management™ Journal

College Savings Plans, Financial Aid, and Tax Strategy
Dean Richard Whiteside, PhD and Prof. George S. Mentz, JD, MBA, MFP ™ Master Financial Professional

For years, the annual rate of increase in the cost of a year of study at a college or university has outpaced the rate of inflation. Today the cost of earning a college degree has promoted the college purchase into second place, after a home, on the list of most expensive purchases made by American families. For some families, the cost of the college purchase may exceed even the cost of their home purchase!

The College Board reported that the average annual cost for one year of study, living at home, at a four-year publicly supported institution was $13,463 for academic year 2002-03. The annual average cost of attending a private college or university during 2002-03 amounted to $27,667. If the annual rate of increase in these costs averages 5% in the future, the cost of a baccalaureate degree for a child entering the first grade in September 2003 will reach approximately $104,000 at a public institution and just over $214,000 at a private institution. The financial burden on families with more than one child is, and will continue to be, enormous. Today's parents of young children are left wondering, will we be able to send our children to college?

Concern over the cost of a college education isn't new. Each generation of parents has wrestled with the problem. While today's costs are higher than ever before, parents of prospective college-bound students now have many more options at their disposal for dealing with these costs. In fact, the sheer number of options and the complexity of some of them has given rise to a whole new field of financial planning - financial planning for college costs. Five key questions drive the financial planning for college.

1. How much financial aid will be available?
2. Will we be eligible for need-based financial aid?
3. How much will we pay from annual income?
4. How much will we pay from savings?
5. How much will we finance?

Since the answer to any one of these questions effects the answer to the remaining questions, any discussion of college finance must focus on these five questions as a group. The information needed to create a financing plan suitable for a particular family is extensive but it can be categorized into broad categories for the purposes of gaining a basic understanding of the available options. For the purposes of clarity, the following categories will be discussed.

1. Financial aid programs
2. Tax relief provisions for families experiencing educational expenditures
3. Tax incentives for those wishing to save for educational expenses

These categories are analyzed as they relate to the Financial Aid Process model shown in the Illustration 1.

Financial Aid Programs

Creating an effective strategy for financing a college education requires some basic knowledge of the financial aid programs and processes currently in place. While financial aid rules and regulations are numerous and complex, families trying to formulate a college investment strategy only need to understand the basic principles of the process. Two types of financial aid are available: need-based financial assistance and merit-based financial assistance.

Merit-based financial aid awards recognize the student's special skills or academic achievement. In making these awards, institutions do not consider whether or not the funds are needed by the student. The only consideration is the individual's special abilities or achievements. Need-based financial aid involves an analysis of the family's ability to pay for college with financial aid being awarded to cover the portion of the cost of college that exceeds the family's capability. This assessment of "need" involves the consideration of a number of factors including the cost of a particular college, the family's income and the family's assets.

Financial assistance can come in the form of grants, scholarships, loans or work-study arrangements. Grants and scholarships represent a real reduction in the cost of attending the institution and carry no obligations for repayment. Educational loans come in many forms but they all share the requirement that the amount borrowed plus interest must eventually be repaid. Work-based financial assistance comes in the form of an hourly wage for services performed.

The funds for these programs come from a variety of sources including the federal and state governments, the colleges themselves, private organizations and scholarship foundations. Funds from state or federal or state sources are administered in strict compliance with the rules and regulations established by the federal government and the state providing the assistance. In the case of funds from the federal government, the rules and regulations apply uniformly to all residents of the United States. Individual states are free to establish their own rules and regulations for financial aid funded from state sources. Private organizations, individuals and colleges are free to establish their own rules and regulations for the administration of the funds they provide. As a result, a particular college student may have to comply with several sets of financial aid rules and regulations. Although there are differences in these sets of regulations, they have many commonalities - particularly in the areas of calculating cost, determination of what a family can contribute and the calculation of financial need.

The real cost of attending a college includes what must be paid for tuition, student fees, living expenses, books, transportation to and from the school and miscellaneous personal expenses. The total of these for a particular college is called its "annual cost of attendance." The living expenses for students choosing to live on-campus are represented by the charges the college makes for room and board. The families of students living at home do not experience the college's room and board charges but they do experience a real cost in providing housing and meals for their college age children. The annual cost of attendance budget recognizes these costs by using a "home maintenance allowance" - an estimation of these costs - as an item in the student cost of attendance budget. Tuition, fees, room and board are paid directly to the college and represent a direct expense. The cost of books, transportation, home maintenance and miscellaneous expenses are paid as incurred by the family and represent indirect or out-of-pocket expenses. Regardless of whether the expense is a direct or indirect expense it is still part of the real cost of going to college and is therefore used in determining the student's annual budget.

Current public policy defines college attendance as a voluntary activity. Unlike the elementary and secondary educational opportunities that are provided on a cost free basis to every U.S. resident, the costs associated with attending college, although subsidized heavily by state and local governments, remains an obligation of the student and their family. To make attendance possible, financial aid is provided to help the family cover the portion of the cost of attendance that exceeds the family's resources. This system requires that some method be employed to determine what a particular family can afford to pay for college. This is called the family contribution and includes both what the parent and the student can contribute toward the cost of attending.

The United States Congress has developed a methodology for determining the expected family contribution for those students desiring to receive federally funded financial aid. This approach - the Federal Methodology - is also used by many states in the administration of the programs that they sponsor. The Federal Methodology is the only method that can be used in determining eligibility for federally funded financial aid programs. In the administration of financial aid funded by individual colleges or private parties, those providing these funds may require additional information not considered in the Federal Methodology. As a result, some colleges also employ an "Institutional Methodology" in the determination of ability to pay. These institutionally specific methodologies can be used only in the administration of the funds that come directly from their own resources. An Institutional Methodology can never be used in place of the Federal Methodology for determining eligibility for federally funded financial aid programs.

In the Federal Methodology the parents' and student's earning and assets are analyzed to determine the amount the family can contribute toward the student's educational expenses. Families in stronger financial positions are expected to contribute more than families with lower incomes and fewer assets. It is difficult to provide an estimate of the expected contribution based on income because the formula treats income and assets separately and because the formula allows families to take "deductions" that vary by family size, the state of residence, total taxes paid and the age of the older parent. Illustration 2 provides a very rough estimate of the expected contribution based on family income. For the purposes of Illustration 2 family assets have been excluded.

Illustration 2

Expected Family Contribution
Based on Parent Income

Family of 4
One In College
Older Parent is 48 Years Old

Income Estimated Contribution Income Estimated Contribution
$10,000 0 $75,000 $9,701
$15,000 0 $80,000 $11,096
$20,000 0 $85,000 $12,491
$25,000 0 $90,000 $13,973
$30,000 $80 $95,000 $15,513
$35,000 $876 $100,000 $17,054
$40,000 $1,672 $105,000 $18,594
$45,000 $2,467 $110,000 $20,134
$50,000 $3,342 $115,000 $21,675
$55,000 $4,369 $120,000 $23,215
$60,000 $5,652 $125,000 $24,717
$65,000 $6,912 $130,000 $26,187
$70,000 $8,306 $135,000 $27,657

The family contribution is considered available to offset educational expenses. If there is only one child in college the entire family contribution is considered to be available for the use of that student. However, if more than one child is in college at any given time, the contribution is divided equally among the students in college. Thus, if three children from the same family are in college at the same time, the contribution for each child is one-third of the total family contribution.

Many families are shocked by the amount of the family contribution. When the contribution is added to their fixed obligations for housing, cars and other goods and services they often conclude that providing the amount specified on an annual basis will be impossible. In today's economy, the family contribution is really an index of the family's financial strength. The correct interpretation of family contribution is that the amount represents the amount that the family can absorb, given its current situation, in terms of cash payments or borrowing. Most American families will come to realize that a college education is a financed purchase similar to the purchase of a home or car although the item purchased is far less tangible.

Financial need is defined as the difference between the cost of attendance at a particular college and the family contribution. Because of the wide variation in the cost of attendance at different types of institutions, student need varies widely. Although cost varies from one institution to another, the family contribution remains constant. As a result, a student may have no need at one institution but demonstrate considerable need at another. For example, if the family contribution is calculated to be $15,000 and the student attends a college with a cost of attendance of $15,000, the student's need would be zero. However, if the same student selected a college with a $35,000 annual cost of attendance the student would have $20,000 in need.

The objective of need-based financial aid programs is to provide the student with access to the funds needed to meet demonstrated need. In the best of all worlds, the institution would be able to provide the student with all of the funds needed to meet this need. In reality however, many institutions do not have access to sufficient resources to meet the needs of all students seeking to enroll. When this is the case, the sum of the family contribution and the financial aid offered by the college may amount to less than the cost of attendance. In these cases there is a "gap" between available resources and cost. Such gaps make attending that college more difficult.

A family can calculate its own expected family contribution by using various financial aid calculators that are available on the Internet. One of the most popular and useful websites for financial aid information can be found at: http://www.finaid.org/. This comprehensive financial aid site provides a wealth of information about scholarships, educational loans, college savings plans and a series of "calculators" that allow families to estimate their family contribution, loan repayment obligations, etc.

Tax Relief For Families With Educational Expenses

Federal tax law changes that took place in 1997 and again in 2003 provide tax relief for families with children in college. These mechanisms are most useful to families with students currently enrolled in colleges or to those families with little time left to save for college. The tax changes that took effect in 1997 and 2003 also included provisions intended to motivate families to save for college. The savings options and benefits are detailed in a subsequent section. In this section only the tax relief programs are examined.

The various tax relief programs are describe briefly.

Hope Credits
In 1997, the $1,500 HOPE program was created to make the first two years of college universally available to all American families. For students in the first two years of college taxpayers can claim a tax credit equal to 100% of the first $1,000 of tuition and fees and 50% of the second $1,000. These amounts are indexed for inflation after 2001.

The credit is available on a per-student basis for net tuition and fees (tuition and fees less the amount of financial aid received that is in the form of grants or scholarships) paid for college enrollment after December 31, 1997. For 2003, the credit is phased out for joint filers with between $83,000 and $103,000 of income, and for single filers with incomes between $41,000 and $51,000 (indexed periodically). The credit can be claimed in two tax years for any individual enrolled on at least a half-time basis for any portion of the year.

Lifetime Learning Credits
In 1997, Congress created the Lifetime Learning Credit for College Juniors, Seniors, Graduate Students and working Americans pursuing lifelong learning to upgrade their skills. For those beyond the first two years of college, or taking classes part-time to improve or upgrade their job skills, the family will receive a 20% tax credit for the first 10,000 of expenses. The credit is available for net tuition and fees (less grant aid) paid for post-secondary enrollment. The credit is available on a per-taxpayer (family) basis, and is phased out at the same income levels as the HOPE tax credits. Note - there can only be one credit taken per child, either Hope of Lifetime Learning but not both.

Student Loan Interest Deduction
The Student Loan Interest Deduction provisions of the 1997 tax law changes allows for an "above-the-line deduction" (the taxpayer does not need to itemize in order to benefit) for interest paid in the repayment on private or government-backed loans used for post-secondary education and training expenses. The maximum deduction is $2,500. It is phased out for joint filers with incomes between $100,000 and $130,000, and for single filers with incomes between $50,000 and $65,000 (indexed after 2002). The deduction is available for loans made before or after enactment of the tax change. The loan amount eligible for the deduction is limited to post-secondary expenses for tuition, fees, books, equipment, room, and board, and this tax break has been extended beyond the original application to the first 5 years of repayment.

IRA Withdrawals.
Taxpayers may withdraw funds from an IRA, without penalty, for the higher education expenses of the taxpayer, spouse, child, or grandchild. The amount that can be withdrawn without penalty is limited to net post-secondary expenses (expenses less other forms of grant or scholarship financial aid) for tuition, fees, books, equipment, and room and board.

Community Service Loan Forgiveness
This provision excludes from taxable income loan amounts forgiven by non-profit, tax-exempt charitable or educational institutions for borrowers who take community-service jobs addressing unmet needs.

Saving For College

In addition to providing tax relief, the recent tax code changes also created several college savings mechanisms that receive favorable tax treatment. These provisions should be of particular interest to those families who have several years or more before their children begin to enroll in college.

One of the key questions in formulating a college savings plan relates to the issue of whom - the parent or the student- controls the savings account. In other words, to who does the money really belong. Since savings accounts typically generate interest and such interest may be taxed, many families decide to place the savings in the student's name under the assumption that the student normally is usually in a lower tax bracket than the parents. The second concern expressed by families revolves around the question: if we do save won't these savings reduce our son or daughter's eligibility for financial aid?

In the vast majority of cases, it is in the long-term interest of the parents to maintain control over the savings earmarked for college even though some of the interest earned may trigger increased income tax liability. The existing needs analysis formulas provide a relatively favorable treatment of parental savings when compared with the treatment of student savings. In constructing the needs analysis formula, Congress recognized the simple fact that parents should be saving "for their own future - for their retirement." As a result, two provisions were established that impact how parental assets are used in the determination of family contribution. The first provision establishes an "asset protection allowance" that is determined by the age of the older parent. The amount of the allowance is deducted from the total asset value thereby reducing the overall value of the asset for needs analysis purposes. The second provision involves the percentage of the remaining asset balance that enters into the family's adjusted income. Currently this percentage is set at 12% of the remaining asset balance. The 12% value is then added to the family's adjusted income. The total adjusted income is then "taxed" using a sliding scale depending upon the level of adjusted income. The highest marginal rate for parents is currently 37% excluding state and non-federal taxation.

Student assets are treated more harshly in the needs analysis formula. Congress determined that the primary focus of college-age students should be on completing their education, not providing for their long-term retirement needs. As a result, there is no asset protection allowance provision for student assets. Furthermore, the percentage of the student controlled asset considered available to underwrite the annual cost of attendance is set at a flat 35% rate. Illustration 4 demonstrates how these provisions impact eligibility for financial aid for a family with no assets, a family with $100,000 in assts held in the parents' names and a family with $100,000 in assets held in the student's name. The table is constructed for families with identical incomes attending the same institution.

As detailed in the illustration, the asset held in the parent's name retains approximately 96% of its initial value (assuming a 2% annual interest on the principal) after four years of deductions for college expenses. When the asset is in the student's name less than 20% of the original value remains in tact. Since many financial aid packages will also include student loans, families with considerable assets are in a position to reduce reliance on loans by choosing to utilize a larger percentage of the asset value than is required by the Federal Methodology. This incremental use of assets can reduce the family's reliance on student loans that will likely be a part of the student's financial aid package.

Many families underestimate the power of long-term savings. Even modest monthly savings beginning when a child is born can create a sizeable asset to cover college related expenses. Illustration 3 shows the accumulated value of family savings for a newborn child (18 years of savings prior to college entry) for interest rates between 2 and 5% annually for monthly savings of between $50.00 per month and $700 per month. This analysis assumes that the savings are in a tax-free investment vehicle and that the monthly payment occurs on the first of each month.

Illustration 3

Savings Calculator

Annual Interest Paid On Account
Amount Monthly 2% 3% 4% 5%
$50 $13,009 $14,333 $15,832 $17,533
$100 $26,017 $28,666 $31,664 $35,062
$200 $52.035 $57,331 $63,329 $70,131
$300 $78,052 $85,997 $94,993 $105,197
$400 $104,069 $114,622 $126,658 $140,263
$500 $130,086 $143,328 $158,322 $175,329
$600 $156,014 $171,993 $189,987 $210,394
$700 $182,121 $200,659 $221,651 $245,460

Illustration 4
Impact of Asset Value on Financial Aid Eligibility

No Assets $100,000 Parental Asset $100,000 Student Asset
Institution's Cost of Attendance $25,000 $25,000 $25,000
Family income $75,000 $75,000 $75,000
Contribution from income $9,701 $9,701 $9,701
Assets $0 $100,000 $100,000
Asset protection allowance N/A $44,400 $0
Adjusted asset value N/A $55,600 $100,000
% of asset used to supplement income N/A 12% 35%
Amount of asset available as a supplement to income N/A $6,672 $35,000
Amount of supplement added to family contribution at 47% of supplement N/A $3,136 N/A

Total family contribution $9,701 $12,837 $44,701
Remaining need (cost less family contribution) $15,299 $12,163 ($19,701)
Asset value remaining after 4 years assuming no interest growth * N/A $95,868 $19,322
% of asset remaining post college 95.87% 19.32%

.

* Analysis of Asset Depletion: Parent versus Student Asset

Parent Asset
Student's Year In College 1 2 3 4

Age of Older Parent 48 49 50 51
Asset Beginning Balance $100,000 $98,801 $97,711 $96,731
Annual Interest 2% 2% 2% 2%
Asset Protection Allowance $44,400 $45,500 $46,700 $48,100
Adjusted Net Worth $55,600 $53,301 $51,011 $48,631
Conversion at 12% $6,672 $6,396 $6,121 $5,836
Taxation Rate at 47% $3,136 $3,006 $2,877 $2,743
Revised Asset Value $96,864 $95,795 $94,834 $93,988
Plus 2% Interest $98,801 $97,711 $96,731 $95,868
Percent of Asset Remaining 95.87%
Total Cash Expenditure From Asset $11,762

Student Asset
Student's Year In College 1 2 3 4

Asset Beginning Balance $100,000 $66,300 $43,957 $29,143
Taxation Rate 35% 35% 35% 35%
Used For educational Expenses $35,000 $23,205 $15,385 $10,200
Remaining Asset $65,000 $43,095 $28,572 $18,943
Pus 2% Interest $1,300 $862 $571 $379
End of Year Asset Balance $66,300 $43,957 $29,143 $19,322
Percent of Asset Remaining 66.30% 43.96% 29.14% 19.32%
Total Cash Expenditure $83,790

Given the existing needs analysis methodology, the only time placing the money in the student's name makes sense is when the parents are certain that their financial situation is such that there is no way that the family will qualify for financial aid - even at America's most expensive college and universities or if there are estate planning considerations. In these situations a transfer of funds to the student may be beneficial from the parents' tax standpoint.

Estate Planning, Gifts, and Control
Unless you are wealthy (individual assets over $1 million adjusted periodically for inflation), maintaining custody of the accounts holding the funds for a child's educational expenses should not affect your estate plan. Two types of accounts generally are at issue: interest bearing savings accounts or investment accounts in the name of the child where a parent, guardian or third party is the owner or custodian over the account until the child goes to college. The value of any account over which you have custody is reflected in your estate, if you name yourself custodian and you die while the child is a minor.

If you and your spouse are worth over $1 million individually or cumulatively, you may need to evaluate how you invest for a child or grandchild's education. Unfortunately, the only way to reduce estate taxes is to reduce the size of your estate. One of the most effective ways to accomplish that goal is through gifts. You can presently give up to $11,000 ($22,000 with your spouse) per year to each of your children tax free. In a sizeable estate taxed at 49%, that $22,000 in inheritance would be reduced to just $11,220. Such annual gifts can be especially valuable (and significant in reducing estate taxes) when they consist of appreciating assets. You can also give more than this amount annually, but the gift(s) will count against your Unified Tax Credit. However, you can pay college tuition directly to an institution on behalf of a student without incurring gift taxes.
What are Custody Accounts: Advantages and Disadvantages If your children are young or if you prefer that they not have control of cash, you may want to consider establishing a custodial account under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). Under these provisions, gifts and investment earnings can accumulate under your supervision as custodian. As a note, state laws affect this type of account, and your child may have rights to these investments at age eighteen or twenty one (age of majority). Keep in mind that the kiddie tax laws may apply here and unearned income may be subject to the parents tax rate until age 14.

529 Plans (Section 529 of the Internal Revenue Code)
A 529 is an investment plan operated by individual states that are designed to help families save for future college costs. As long as the 529 Plan meets basic requirements, the federal tax law provides special tax benefits to you.

Each state now has at least one 529 Plan available. Section 529 of the IRS code provides for the establishment of two types of college financing instruments: either prepaid tuition or college savings plans. (Some states offer both options.) Some states offering prepaid tuition contracts covering in-state tuition may allow you to transfer the value of your contract to private and out-of-state schools. However, you may not receive full value in these kinds of transfers. If you use a 529 savings program, the full value of your account can be used at any accredited college or university in the country (and even some foreign institutions). Both types of 529 financing plans are funded through "after tax dollars." See Illustration 7 for a summary of the 529 Plans sponsored by each state.

A 529 plan investment grows tax-free for as long as your money is within the plan. When you allow a distribution to pay for the beneficiary's college costs, the distribution is federal tax-free as well. This applies for distributions in the years 2003 through 2010. Unless Congress extends this tax code provision, 529 distributions made after 2010 will be taxable to the beneficiary (i.e. only gains above the principal originally invested).

The big benefit is that the donor stays in control of the 529 Plan account. With few exceptions, the named beneficiary has no rights to the funds.

The U.S. Department of Education maintains that 529 savings accounts are treated as a parent's asset in determining eligibility for federal financial aid. Thus, the expected contribution towards your child's college costs is subject to the same treatment as are other parental assets - treatment far more favorable than if the funds are under the ownership of the student.

Since individual institutions are free to develop their own methodology for awarding financial aid funded by the institution (as opposed to financial aid programs funded by governmental agencies), some institutions may decide to treat 529 Plan assets differently when determining eligibility for institutionally funded financial aid.

529 Prepaid tuition plans have a much greater impact on financial aid eligibility. Distributions from 529 Prepaid Tuition Plans reduce financial aid eligibility dollar for dollar. Thus, if your prepaid tuition contract pays out $5,000 in tuition benefits this year, the student will be considered as having $5,000 less need for financial aid.

Upon the completion of a beneficiary's education, the balance in a 529 account reverts to the owner of the 529 account. This will trigger a tax event on the accumulated earnings for the account owner.

Details regarding the 529 plans offered by each state can be found on the Internet. The most comprehensive sites can be found at: http://www.savingforcollege.com
and http://www.collegesavings.org.
Coverdell Accounts

What used to be called the Education IRA (established in 1997) is now titled the Coverdell Education Savings Account (ESA). In 2002, the contribution limit increased from $500 per child to $2,000 per child. However, if accounts that are established by different family members for the same child cause the total contributions to exceed $2,000, a penalty may be owed.

The parents' after tax contribution goes into an account that will eventually pass to the named child if the funds are not used for college expenses. Unlike unused funds in most 529 plans, the donor cannot reclaim these funds. Since the annual contribution limit is low, the level of fees and charges to maintain this type of account should be a major concern when selecting the company to manage the Coverdell IRA. In general, Coverdell accounts must be fully withdrawn by the time the beneficiary reaches age 30, or else it may be subject to tax or penalties

Funds in a Coverdell account are considered an asset of the student, not the parent, for financial aid purposes. Under the existing federally mandated financial aid needs analysis system, 35% of a student's assets are considered additive to the student's contribution from income. Therefore, if the value of a Coverdell is $20,000, the impact on the student's eligibility in the first year of attendance would be $7,000 or 35% of the total account value. Two notes of interest here are that these types of accounts may be phased out for singles earning 95-110 thousand and Joint Filers earning 190-220,000 dollars. Moreover, these accounts may be eligible for used for elementary or secondary expenses.

Conclusion
Although college is more expensive than ever and college costs are growing at a rate faster than inflation, today's families have many more options to use in creating a financial plan for funding the college experience. Creating the best financial plan for your family means tailoring the use of these options to your specific needs and capabilities. This design begins with a clear understanding of how all of the component parts of the college finance system function. Illustration 5 provides a graphic representation of how various savings mechanisms play into the financial aid process.

Illustration 6 provides a comparative analysis of the different types of college savings instruments.

The key elements to evaluate are:

1. Whether your family will qualify for financial aid
2. If your family will qualify for financial aid, you probably want to keep the savings asset in the parents' custody. This strategy will reduce the impact that college savings will have on financial aid eligibility. Coverdell and 529 plans allow parents to save for college without having to pay taxes on the account earnings.
3. If you will not qualify for financial aid, there may be clear tax advantages to placing the college savings asset under the student's control. This strategy will normally reduce parental tax liability. (However, if the savings are in the form of Coverdell IRAs or a 529 Plan, the interest earned by the custodian (the parent) is non-taxable.)
4. If exposure to estate taxes is a concern, the Uniform Transfers to Minors Act (UTMA) or the Uniform Gift to Minors Act (UGMA) may provide an advantageous option for reducing estate tax exposure.
5. Even if there is no likely exposure to estate taxation, families who will not qualify for financial assistance may experience tax advantages by annual gifts up to the maximum allowed by law.

*Note - This document does not claim to give investment, tax nor legal advice. All tax rules or quoted numbers can be changed or indexed by the government at any time. Some phase out salary information in this document may be based on MAGI or AGI. Moreover, some of these tax breaks have sunset provision in which they may expire in a few years. Please consult with a licensed tax, legal, or investment professional before making any important decision or any decision related to this document. Advice herein is subject to the academic exemption for research. All Rights Reserved 2003

About Prof. Mentz:
Prof. Mentz is first person in the United States to achieve "Quad Designations" as a JD, MBA, licensed financial planner, and Certified Financial Consultant. Mr. Mentz is presently serving as President and Professor for The American Academy of Financial Management ™. Mr. Mentz has consulted with Wall Street Firms, trained hundreds of financial advisors, and instructed several hundred clients on educational savings, tax strategy, and estate planning. Mr. Mentz is a Licensed Attorney and Counselor of Law (LA), and has researched and published worldwide in the area of taxation, financial analysis, investments, estate planning, and financial consulting. Mr. Mentz is presently an adjunct faculty member for Several Universities teaching online and on-site, and he has published, written, and presented multiple articles and research in venues such as print, magazine, journals, television, college campuses. Mr. Mentz has prior experience as a Senior Financial Planner and Wealth Management Advisor for a Wall Street Firm providing training and research on educational investing. He holds the MFP™ Master Financial Professional Credential and the CWM™ Chartered Wealth Manager Credential.

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Bibliography:

The accuracy and completeness of the references is the responsibility of the author. References to personal letters, paper presented at meetings, and other unpublished material may be included. If such material may be of help in the evaluation of the paper, copies should be made available to the Editor. Papers which are part of a series should include a citation of the previous paper. Explanatory material may be appended to the end of a citation to avoid footnotes in text. The format for citations in text for bibliographic references follows the Publication Manual of the American Psychological Association (4th ed., 1994). Citation of an author's work in the text should follow the author-date method of citation; the surname of the author(s) and the year of publication should appear in text. For example,

Paisley (1993) found that...
Recent research has shown that...(Schauder, 1994)
In other work (Gordon & Lenk, 1992; Harman, 1991)...

Examples of citations to a journal article, a book, a chapter in a book, and published proceedings of a meeting follow:
Buckland, M., & Gey, F. (1994). The relationship
between recall and precision. Journal of the
American Society for Information Science, 45, 12-19.

Borgman, C.L. (Ed.). (1990). Scholarly
communication and bibliometrics. London: Sage.

Bauin, S., & Rothman, H. (1992). "Impact" of
journals as proxies for citation counts. In P.
Weingart, R. Sehringer, & M. Winterhager (Eds.),
Representations of science and technology (pp.
225-239). Leiden: DSWO Press.

In case of any question about bibliographic forms, refer to the Publication Manual of the American Psychological Association, 4th edition, Washington, DC, 1994. Copies may be ordered from: APA Order Department, P.O. Box 92984, Washington, DC 20090-2984, USA.

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* The Global Journal of International Financial Analysts (JIFA) *
* IZZZ 1095-139X * 2000
* *
* ANNOUNCEMENT / CALL FOR PAPERS *
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The Global Journal of International Financial Analysts (JIFAM) is a scholarly, peer refereed journal that provides a forum and means for exchanging information on the social impact of information technologies. JIFAM's scope includes the effects of information technology on business, socialization, entertainment, and education. The Journal publishes
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