<p>Ok, since everyone’s gonna be applying for financial aid around this time of year let’s get a thread started on some legal and other low-risk methods to minimize your EFC on the FAFSA and CSS Profile and/or maximize need-based aid from colleges.</p>
<p>–keep assets in parents name
–pay down debt with savings you can afford not to have liquid
–have the stats to apply to top schools which have generous aid programs</p>
<p>–keep assets in parents name
–pay down debt with savings you can afford not to have liquid
–have the stats to apply to top schools which have generous aid programs</p>
<p>–keep a large amount of your savings in an overseas bank account and report only the amt you have in your domestic bank accounts
–enroll a parent in a local community college so you can claim to have multiple people in
your household attending college</p>
<p>[FinAid</a> | Financial Aid Applications | Maximizing Your Aid Eligibility](<a href=“http://www.finaid.org/fafsa/maximize.phtml]FinAid”>http://www.finaid.org/fafsa/maximize.phtml)</p>
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Illegal. You are required to report all assets.</p>
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<p>Doesn’t work. A parent is not allowed to be claimed as one in college on a student’s FAFSA.</p>
<p>Unfortunately that last one doesn’t work. The question about how many are in college specifically excludes parents.</p>
<p>Ah, grasshoppers … you are so knowledgeable! ;)</p>
<p>thank you, Sensei</p>
<p>Why did the OP answer his own questions partially with erroneous information?</p>
<p>OP…I have said this before. Why can’t folks who are fortunate to have some assets that can help their kids in college just be GRATEFUL they have them. Instead, each year there are folks just dying to somehow hide these assets. </p>
<p>Sure, there are some legal and simple ways to do so. Buy things you REALLY need to minimize assets in bank accounts. Keep accounts in the parent name.</p>
<p>BUT the reality is that unless you have a TON of assets, your EFC is going to be largely based on your INCOME…not your ASSETS.</p>
<p>If you have a large income, you might want to use an EFC calculator to see if minimizing your assets even MAKES a difference in your possible eligibility for need based aid.</p>
<p>If you have some significant assets, then you probably have enough to contribute to college costs. Be grateful if that is the case.</p>
<p>I think this was a ■■■■■ post. Notice only two posts.</p>
<p>These strategies will have the largest impact on need-based aid eligibility:
“Pay off consumer debt, such as credit card and auto loan balances” (from finaid)
how would this help? i mean wouldn’t it be beneficial if you did state your parent’s credit card debt?</p>
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<p>There is NO PLACE to state your parents credit card, or any other consumer debt (car loans, personal loans, etc) on the financial aid application forms. Consumer debt is NOT factored into the financial aid equation. On the FAFSA even your primary residence equity is not considered. It is on the Profile. BUT no other consumer debt is.</p>
<p>There is no place to state debt. Spending is a choice. The formula used to calculate EFC does not consider anything but income, assets, and family situation. Those in bankruptcy are expected to contribute just like those who are not.</p>
<p>The “advantage” of spending down is that the assets are not in the account as of the date the FAFSA is filed … which may or may not make any difference, due to the asset protection allowance. Spending now on things that you would spend on later, anyway, could be wise.</p>
<p>When we fill out the CSS Profile we are asked about credit card debt. Like the question about cars, if it’s asked it’s asked in the supplemental questions. Different colleges have different supplemental questions. </p>
<p>For us it’s SQ-211: “Enter the current total of consumer debt (money borrowed for cars, appliances, credit cards, etc.) owed by your parents. (Do not include mortgage debt or other debt already included in Section PA.)” A secondary question then asks: “Provide the details of the total consumer and installment debt of your parents.”</p>
<p>Run the FAFSA calculators, and find out what the precise figure for savings protection is for people your parents age. If possible, starting several years before you will submit the FAFSA for real, move cash/stock/etc. holdings into retirement accounts. If your parents have not yet maximized their 401(k), IRA, Keough, etc. accounts and they can safely “save down” their non-retirement funds they should do so. If they have maximized all of these, and sizable non-retirement funds remain, they could consider shifting money into full-life insurance or an independent retirement annuity. This kind of financial action should only be taken after thorough review of your situation. For almost everyone on the planet, this would not be useful, but there are indeed families where it is an appropriate choice.</p>
<p>If the student has earned income, the family can “save down” some of the total family money by putting it into an IRA for the student. The student’s income for the year will remain reportable on the FAFSA, but the amount the student or the parents hold as reportable cash will be lowered. Again, this strategy can be something that the family begins to apply as soon as the potential college student has earned income.</p>
<p>Please note that this is primarily a FAFSA strategy. The CSS profile will view retirement funds differently.</p>