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Financial Aid, FAFSA and Trust Funds

boxdocboxdoc Registered User Posts: 7 New Member
Here is a tough one.....my son's grandparents put away a large sum of money for my son's future....however, its in a trust that he cant touch until he is 21. So I am assuming that although my income would qualify him for some financial aid, he is basically out of luck since he has a trust (although it cant be used for college at this time)? Comments and suggestions welcomed!

Replies to: Financial Aid, FAFSA and Trust Funds

  • 4kidsdad4kidsdad Registered User Posts: 4,602 Senior Member
  • mom2collegekidsmom2collegekids Forum Champion Financial Aid, Forum Champion Alabama Posts: 83,795 Forum Champion
    edited August 2014
    If the amount is enough, then possibly he won't qualify. I guess the assumption is that you could co-sign the amount that your son needs, and then have him pay it off when he gets his money. Or do a Plus (which has easier qualifying) with the agreement that he pays it off when he gets him money.

    The FA calculations assume that aid is for those who truly don't have/won't likely have the means to pay. If delayed trust funds were a way to "protect money", then more would do it that way.


    >>>
    So I am assuming that although my income would qualify him for some financial aid,
    >>>

    If he is applying to the schools that give the best aid, then both parents' incomes will likely count. If your child has a non-custodial parent, his income would be included (plus any new spouses' incomes). Those schools ALSO use CSS Profile to determine aid.


    BTW...have you considered telling the Grands that aid will not be given when there is this trust, so a loan would be needed? maybe they will change the terms for education.
  • intparentintparent Registered User Posts: 34,157 Senior Member
    My kid's school has removed a trust from consideration for FA because the trust money is not accessible until age 25. They did not ask to see any trust documentation, although I think they would be well within their right to do so. I am not sure what they would do if the money were accessible during her undergrad years, though, as your kid's will be in junior or senior year.
  • Bromfield2Bromfield2 Registered User Posts: 3,294 Senior Member
    Who is the trustee? Would it be possible to talk to the trustee and explain the situation and see if there is some way that your son could use the money for his college tuition.
This discussion has been closed.