Roger_Dooley

WSJ writer Rachel Louise Ensign lists the biggest errors families make in preparing for the college financial aid process, and shows how to avoid them: income timing, wrong family members holding assets, merit aid mistakes, and more:

How Not to Blow It With Financial Aid - WSJ.com

dodgersmom

Hmmm . . . show me anything in that article that isn't already common knowledge here on CC.

And I think the author got it wrong with respect to transferring student funds into a 529 account. She says it should be done before January of junior year. But my understanding was that assets don't need to be in place until immediately prior to the filing of the FAFSA or Profile. Am I mistaken?

Roger_Dooley

I'm sure the info is old hat to CC pros, dodgersmom, but there are always newbies just getting down the learning curve. Not sure about the exact answer to your question, though I seem to recall some forms that look back a year. Also, interest/dividend income that's on a 1040 or other income statement with no related asset might raise some questions in the aid office. The FAFSA may be cut-and-dried, but individual aid offices may use the info in different ways.

SlitheyTove

What I found more interesting than the article were the comments. Reading them, you'd think that all poor kids get tons of money from the government to go to any school they want, not saving money is the key to getting good financial aid, absolutely no college is affordable, all minorities get tons of scholarships, etc etc etc. Pretty sobering to realize just how misinformed people are.

Roger_Dooley

Not everyone hangs out at CC to get better informed!

romanigypsyeyes

ST, how often do we see that myth posted by REGULARS on CC (not FA regulars, just CC in general)? I'm not surprised at all.

Longhaul

I thought it was a solid article. So many of the parents of my son's classmates have no idea that Net Price Calculators exist.

And in our state, state schools have high COA and we have zillions of private schools, many don't price compare. The kids who usually go to the privates are athletes and the coaches have explained that costs could come out better or the same as state schools.

vballmom

dodgersmom your understanding was correct with respect to the timing of 529 accounts. Transfers of student assets into 529s can be done any time prior to filing FAFSA. What's reported on FAFSA is a snapshot of all assets as of the day it's filed, so moving money around in the past has no effect. However if there are capital gains that are realized due to the sale of assets in a student account such as a UTMA, then that should be done prior to the base year.

Profile schools will often request an initial Profile filing in October, especially for ED and EA applications. So assets might need to be transferred earlier than for FAFSA schools.

whifang

i got a question..
the parents earn $27,000 a year.
the student has a part time job of 12hr/week of $8 an hour.
the student's money in the bank exceeds $10,000. would this affect the EFC if this student is to apply for FAFSA again in the 2013-2014 school year?

because i heard that if the parent's income is under $30,000 a year, the student's assets would be overlooked, is this info correct?

dodgersmom

Well, that's their mistake, isn't it?

4kidsdad

To qualify for 2012-2013 FAFSA's SNT (simplified needs test) which the family may exclude their assets:
A dependent student’s parent(s) must have an adjusted gross income of $49,999 or less.
They must also meet one of the following:

a) Anyone included in the parents’ household size (as defined on the FAFSA) received benefits in last 24 months (last two years?) from any of the designated means-tested Federal benefit programs:
-- the Supplemental Security Income (SSI) Program,
-- the Food Stamp Program,
-- the Free and Reduced Price School Lunch Program,
-- the Temporary Assistance for Needy Families (TANF) Program, and
-- the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); OR

b) The student’s parents were eligible to file a 2011 IRS Form 1040A or 1040EZ (this means they were not required to file a 2012 Form 1040), or the parents are not required to file any income tax return; OR

c) The student’s parent is a dislocated worker.

To be clear on item, “b” above, it does not matter what 1040 version the student’s parents actually filed. What matters is what 1040 version were they eligible to file. If they were eligible to file the 1040EZ or 1040A, even if they actually filed the 1040 long form, the student meets test “b” above.

MaterMia

Can someone explain this line?

Every dollar a child makes in income above $6,130 (the limit for 2013-14 aid) cuts their possible award by 50 cents.

So is this the spring of junior year/fall of senior year that would be counted? Is this true? For ever dollar the student makes - subtract (taxes) and then another .50 in aid?

ohiobassmom

I thought the article summed up a lot of info that yes, I knew from here, but in a form that I felt compelled to email to a friend whose D is a senior this year and asked me about FA stuff recently. It's a nice run-down of the basics.

SinkOrSwim123

I really hope that the one about getting ~$1400 less dollars after freshmen year and less after each subsequent year is not true for many colleges, since that would really suck for me and increase pressure. I heard that they may decrease the grant but increase work-study, which, I guess, isn't as bad as just simply giving less. if they do give less than the previous year, though, does appealing usually work? I just keep worrying about it

ohiobassmom

Might decrease grant and increase loan since the Stafford limit goes up after frosh year.