Welcome to College Confidential!

The leading college-bound community on the web

Sign Up For Free

Join for FREE, and start talking with other members, weighing in on community polls, and more.

Also, by registering and logging in you'll see fewer ads and pesky welcome messages (like this one!)

As a CC member, you can:

Bank account affecting financial aid?

Noxium320Noxium320 Posts: 78Registered User Junior Member
I opened a bank account this year for college so I can save some money that I receive from family and my work study job to pay for loans when I graduate, or just for an emergency. The CSS application asks how much money you have in your account. Last year I did not have an account so I put 0 but will the money in my account now affect how much aid I receive this year?
Post edited by Noxium320 on
«1

Replies to: Bank account affecting financial aid?

  • 'rentof2'rentof2 Posts: 4,327Registered User Senior Member
    It depends on how your college treats student assets. The degree to which it could affect your aid depends on how much money is in the account. FAFSA will take it into consideration for sure, but how a particular Profile school will look at it could vary.

    If you were my kid, I'd suggest you use that money for your college costs now and decrease your borrowing, rather than borrow now and plan to pay it back later. That way you don't have the asset lying around in the event it dings your financial aid, and you have a lower debt load later.

    If you really feel the need for some emergency money, perhaps let your parent hold that for you. When listed as a parent asset it will have more protection and/or be assessed at a far lower rate.
  • MommaJMommaJ Posts: 4,712Registered User Senior Member
    That last bit of advice to hide the money is inappropriate. Whether your parents are "holding" the money for you or not, it's still your asset and still reportable as yours (unless you've simply given it away to them with no expectation or agreement that it will ever be returned).
  • MomCat2MomCat2 Posts: 728Registered User Member
    Is some of the money currently in your account from a Work/Study job?
  • 'rentof2'rentof2 Posts: 4,327Registered User Senior Member
    Well, I wouldn't consider it hiding the money. YMMV. I'd consider it giving it to the parents. Then it is their asset. I know if my kids had an emergency, I'd be paying the tab anyway.
  • thumper1thumper1 Posts: 37,658Registered User Senior Member
    Our kids didn't have their own bank accounts in high school and college. They had trustee accounts where the parents were the primary account holder and the kiddos secondary. Parents got the 1098I for tax purposes...thus these were parent assets.

    To the OP...how much money are you talking about here? Is it tens of thousands of dollars?
  • Noxium320Noxium320 Posts: 78Registered User Junior Member
    Yes some of the money is from my job
    And I don't have that much, a little under a thousand
  • thumper1thumper1 Posts: 37,658Registered User Senior Member
    If you have $1000 in the bank, it will add $200 to your EFC per FAFSA (do students have any asset protection??? I honestly don't remember!!) as student assets are assessed at 20%.
  • MomCat2MomCat2 Posts: 728Registered User Member
    So you are currently in college, and some of the money in your account is from a Federal Work/Study job that you were awarded as part of your financial aid package?

    If so, the part of your account that is earnings from your Work/Study job (or from any other financial aid from the school, such as a Financial Aid "refund" if your package total is more than the billable amounts for tuition, room/board, fees) does NOT get reported under "student assets".

    This issue was discussed in this thread: http://talk.collegeconfidential.com/financial-aid-scholarships/1051214-does-paying-down-loan-hurt-future-aid.html
  • thumper1thumper1 Posts: 37,658Registered User Senior Member
    If so, the part of your account that is earnings from your Work/Study job (or from any other financial aid from the school, such as a Financial Aid "refund" if your package total is more than the billable amounts for tuition, room/board, fees) does NOT get reported under "student assets".

    When you complete the FAFSA, there is a question about how much you earn in work-study monies. That amount is not used to compute your EFC per FAFSA. I'm not sure it doesn't count as an asset if you leave it sitting in the bank. It's not included as "income" for calculating FAFSA EFC.
  • MomCat2MomCat2 Posts: 728Registered User Member
    thumper, see swimcatsmom's post#17 in the thread I linked above, which quotes (and links to) FAFSA instructions.
  • charlieschmcharlieschm Posts: 4,282Registered User Senior Member
    I personally believe a student should keep money they earn in their own bank account. As noted above, it won't make much difference in financial aid unless they just created a new Facebook.

    More importantly, we are trying to teach our kids responsibility in handling finances. The money they earn during a summer is hopefully about equal to what they will need for out of pocket expenses. If they run out of cash, they will have to learn to eat in the college cafeteria more often, and may have to drink less. The more hours he works, the more money he has to play with.

    Likewise, I give my son a credit card in my name, but I see every charge that is made on the web. He knows it is mainly for emergencies and that I will cut him off right away if he misuses it. The bigger danger is when a kid gets a credit card in their own name, and the parent doesn't know how much has been run up in debt and interest until they are drowining in debt.
  • somemomsomemom Posts: 9,321Registered User Senior Member
    I don't see a post #17 from SCM, but re: thumper's post. I have been told by finaid officers NOT to include the amount of finaid $ in your bank account as part of your listed assets. If a student got a refund from the school for off campus living expenses, they would not include that refund, I am extrapolating to think that your WS monies should not be included.
  • thumper1thumper1 Posts: 37,658Registered User Senior Member
    I'll be the devils advocate here...and believe me I'm not sure what the right answer is. If your child has a bank account and deposits money into it from multiple sources (not just WS), why wouldn't the money IN the account be counted? WS money is supposed to be USED to defray college expenses. In theory, there shouldn't BE much of that sitting in a student's bank account. They would have spent it on college things like books, tuition, fees, supplies...whatever.

    On the FAFSA, there is a question regarding work study earnings. You put the amount the student earns in WS in that question. While the work study money is included in the AGI for the student...this WS entry allows the FAFSA formula to deduct it as income for determining EFC.

    I guess I would say...if the FAFSA formula isn't going to include this as an asset, it would be very easy for THEM to subtract it themselves...just like they do for income.

    I hope someone is able to clarify this. Maybe Kelsmom will weigh in.
  • upstatemomupstatemom Posts: 520Registered User Member
    regarding posts #2 and 3 here- the inappropriateness of "hiding money." Puleeeeze! That's what fin aid workshops and books like Paying for College without going broke tell us to do all the time. We recently went to a fin aid workshop at D's HS run by a FAO who told the audience with trusts in their children's names to pull all the money out ASAP! This is all a game we play. We are told put money here or there, ways to maximize, ways to hide assets all the time!
  • thumper1thumper1 Posts: 37,658Registered User Senior Member
    Upstate, there is a HUGE difference between "hiding assets" (e.g.putting the money in a safety deposit box the day you file your FAFSA, or under your bed....it doesn't matter...you still have the money and have to report it) and transfering funds to the PARENT name so that the assessed amount is lower.
«1
Sign In or Register to comment.