<p>Can a student make a financial gift to a parent so that his assets are reduced and we can qualify for financial aid? The assets would then be counted at the parent rate of 5.64. What is the best way to do this? His assets are in a bank acct under his own name. </p>
<p>Also, can the student open a ROTH IRA and further bring down the amount that fafsa will consider at the 20% rate?</p>
<p>Do you know what your EFC is without this asset? If it is already over a certain amount, what kind of aid do you think that you’d get by reducing your child’s assets? Fed and state grants (free money) are only for those with lowish incomes. It’s not unusual for a student from a good-income family to receive an FA package that only includes loans or gaps, although some privates will offer their own grants as FA (but, some cannot afford to do this anymore). </p>
<p>Do you realize that you might just be going thru manipulations only to be told, “OK, now you qualify for student loans.”?</p>
<p>Here’s an online EFC calculator. <a href=“http://www.finaid.org/calculators/finaidestimate.phtml[/url]”>http://www.finaid.org/calculators/finaidestimate.phtml</a> See what your EFC would likely be without that asset in consideration.</p>
<p>Also, do you know what schools your child will be likely applying to? Some are horrible with aid.</p>
<p>The student can open a student-owned 529 and transfer all cash to that account. It will remain a student asset but 529s are assessed at the rate of 5.64 whether owned by the student or the parent.</p>
<p>If it’s really the student’s money, he or she can gift it up to the federal limits ($13,000) but it’s not necessary to do so in order to reduce reportable assets for FAFSA.</p>
<p>A Roth IRA can only be funded up to the amount of earnings, so if the student didn’t work then he/she can’t fund a Roth IRA.</p>