Another FAFSA question

<p>Hello, </p>

<p>As everyone else, we're stressed out over the whole process, but have a couple of questions that I can't find clear answers for. </p>

<p>Have a couple of Series EE bonds grandparents purchased for daughter when she was born - they are in daughters and husband's name - do these get reported as parents or students assets? </p>

<p>Also, my senior put some money from a job into a Roth - is this reported as a student asset? </p>

<p>Not trying to hide anything - just want to do it right. </p>

<p>Thanks - I have learned so much from these forums!</p>

<p>This can be a moral issue. Since your husband can legally cash out those bonds, they are legally his, and I suggest he does this. I suggest this because those bonds are going to be hit up for 35% of value for the first year of student expenses if they are reported as your daughter's according to federal methodology. They will be hit up at about 5% if they are reported as your husband's. A big difference. You need to double check about the Roth IRA. I think it does have to be reported as a student asset as it is accessible for college payment, and there is no penalty to withdraw the money, only to pay taxes on the interest. If it does have to be reported as such I would advise that your daughter use every bit of that money to pay some impending bill before the end of the year, as 35% of that will also be assessed for her first year contribution towards tuition as opposed to about 5% of family assets. One of the first tenets of financial planning for college is NOT to put assets in the student's name for that reason unless it is really unavoidable. Better the money be used towards the students expense and let the family increase its savings. You can see why with those percentages.</p>

<p>Actually, I reviewed the rules for the Series EE bonds, and the rules are quite clear that if the bonds are in both names, it is considered the child's asset and subject to the 35% hit. But if H can legally withdraw the money prior to the 12/31 report date, it can be parental assets if he does so. </p>

<p>The Roth IRA situation is unusual. FAFSA does not ask for Roth IRA monies, so it seems to me that the amount does not need to be reported. But any rules pertaining to Roths assume that the owner is the parent, not the student. You should double check on that. Reading the rules on it, the contributions to the Roth this past year are included as income, and any withdrawals are counted as income, both to the student, but the balance in the Roth is not reported. But please do check on this and let me know. I have not seen this situation where the Roth is in the student's name.</p>

<p>Thanks for the info - I will see if I can get any further information on the Roth and will share if I can learn more. </p>

<p>We did not learn the "don't put it in the child's name" theory until waaaaay too late. Oh well....and with daughter being a Senior this year, not much we can do about it at this point, unless we decide to put it toward a vehicle for her, which at some point we will have to do anyway. </p>

<p>Thanks again!</p>

<p>EE bonds are confusing.
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