Selling your stocks, mutual fund shares, or retirement fund holdings and using the proceeds to pay tuition are examples of investment liquidation. Parents contemplating selling investments to cover education costs should consider the following:

• Interest rate. Not applicable.
• Fees. Not applicable.
• Credit eligibility. Not applicable.
• Tax considerations. If you made a profit on the investment sale, your taxable income may be subject to capital gains tax. If losses on the investment sale are incurred, you may be able to write off a portion or all of the loss amount.*
• Investment sale amount. Limited to the amount of investments you are able to sell and the fair market value of those investments.
• Investment sales for all your children. Many parents don't have enough investments available to sell to cover every child for all their years of college.
• Investment sales for school-related expenses. Can finance expenses in excess of cost of attendance, such as a commuting vehicle, travel home, furniture, and appliances.
• Deferment and forbearance clauses. Not applicable.
• Repayment. Not applicable.
• Repayment plan options. Not applicable.
• Liquidity, emergencies, and other expenses. Once you sell investments, you will no longer have them available to finance your retirement, for emergencies, or to cover other expenses.
• Lost retirement income and capital appreciation. Once investments are sold, you will not have them available as a resource for accrued interest earnings or for retirement income.

*To learn more, contact your broker or investment holder.

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