Bank Accounts and Financial Aid?

<p>Is it true that having a bank account harms my chances at getting a greater amount of financial aid? My parents, I would consider, are lower-middle class and do not own a home. They don't have any money saved for my college studies, so it's pretty much going all on myself. Consequently, I started to work this year (I'm a junior) and hope to have a little bit of money saved by the time I go to college. It won't be much, I'm talking under 15,00 thousand here, so I don't think it's a big deal. However, my mom insists that I shouldn't open an account in my name because it'll reduce my financial aid. This just doesn't make sense. Aren't we supposed to be saving for school? Besides, it's not that much money (in respect to college, where that's probably half of one semester) and where else am I supposed to keep it? Thanks, any clarification would be great.</p>

<p>Unfortunately, I believe that your Mom is right. In general, money that is in the student's name counts "against" you more than money in parents' savings accounts. This is a very simplistic answer, however and many factors enter into the calculation of your Expected Family Contribution (EFC). I'd urge you to go to the old Parents Forum and read discussions on Financial Aid there. Also go to the CSS and other websites and read up on the basics. Hopefully other, more knowledgable folks will post here and help you out. It's great that you are able and willing to save that much money. I think the colleges will realize that your earning potential won't be as great once you are in college. Generally I'd say that they expect a student to contribute anywhere from $1200 to $2500 per year from Work Study, if it's offered. Good luck.</p>

<p>now, i do have a bank account only with $1~2000. sadly i am considering erase that account if that will against me in financial aid.. (and i will put my money under my bed :-)</p>

<p>any comments would be helpful..</p>

<p>I wouldn't sweat the $1-2K account too much - the financial aid impact of this would be $350 - $700. In general, student assets are factored in far more heavily, so avoid transfers of money to you by parents, grandparents, etc.</p>

<p>HimilconI, an account in your name with $15K in it will add about $5K to your EFC the first year. The same amount in your parents' name would add less than $1K to your EFC. Of course, even if you hide the money in your mattress you are still required to report it on your forms. Lying on the FAFSA, a federal government document, isn't a great idea. There may be some creative solutions, though, like paying expenses while your parents set aside money for you, that might be legal and defensible.</p>

<p>Try the EFC</a> Calculator to play some "what if" games.</p>

<p>It is an unfair fact that money in the student's name is hit at 35% vs about 5-6% if it were in the parents' names. Hopefully, that situation will change--I hear some schools are moving that way. It is unfair in that those who are being assessed this additional amount are those who don't know about the way financial aid is assessed. Everyone is being advised these days to move the student's money before it has to be reported for college purposes.</p>