Can you move student assets to parent account in order to get more financial aid?
Or
Can we used up all the assets my son has, then apply for private school?
ETA…your son got accepted ED to Northwestern and the aid was insuffient for him to attend. Unless a huge amount of money is in student assets, this was likely because of parent income. Was it?
First…you might want to check your income first. The need based financial aid formulas are heavily weighted towards parent income. If your income is high enough, you won’t qualify for need based aid anyway.
And most colleges do not meet full financial need for all accepted students.
Sure, you can spend down your kiddo’s assets. But then you won’t have them for college costs.
Is your son a tippy top student who will gain acceptance into a tippy top school where full need is met for all accepted students?
Where is your son considering applying to colleges? How much in assets are you talking about here? What can you afford to pay? Have you run a net orice calculator to get an estimate of your net cost at any of his colleges?
Have you already submitted the FAFSA and/or Profile to his colleges? If so, it’s too late to shift assets now.
You can put a chunk of your son’s assets into a 529 which then can be used for college qualified expenses…and is assessed at the 5.6% parent asset rate.
But really…do check first…because all of thes financial gymnastics might net you nothing in additional need based aid…depending on the college aid policies, and your incime.
We got financial award from NU that family contribution was more than half of whole budget (about 40k).
because of student asset.(my wife passed away last year and life insurance amount is stored in my son’s annuity accout until he becomes 18 years old.)
So we appealed but did not work.
Now we have to pay for 40k. Since my wife had been for sick for 7 years therefore, we have a lot of debt here and there.
If my son takes a gap year and used up paying for all the debts, family contritution will go down nex year when he returns to Northwestern University?
Also, do they compare prior css file when they evaluate next year?
I know it is very silly question, but I am trying to find the way my son can still go to NU and paying for family debts as well.
My question was is it ok to move student asset to parent asset?
Thank you.
When does he turn 18? At 18 can he access the money? If so, put it into a 529 then it will be a parental asset.
If you look through this forum, you will see a number of discussions on the topic of moving kid’s money around. Some people feel that it is unethical to do such a thing. Other’s don’t. Your son can spend his money as he pleases, and get that asset down to zero if he wishes. He also can pay you back for money you spend on him, or give money to you, or whatever. What matters to the financial aid office is where the money is when you file the financial aid paperwork.
What would his mother would have liked him to do with his inheritance? Would she have been happy to see it all go toward his education? Then send him off to NU, and let him use it up that way. Would she have preferred that he choose a less expensive place to study, so that he would have some money left over after he finishes college? Then sit down with him, and help him figure out how to do that.
How much is in your son’s account from the life insurance? How many years of college will it pay for? I don’t quite understand - are you wanting your son to pay off your debts with his college money? Did your wife express her wishes as to why she was listing your son as the beneficiary of the policy? Did she want it to be used for college or for family debts?
Thank you for your advice
It has to used for my son’s college. But it is not enough for 4 years.
I’m sorry for your loss.
But I am confused.
you can spend down your son’s assets to pay for things for him…and that is perfectly OK. But really, you can’t spen down his assets to pay your wife’s medical bills, or other bills that are not his.
I know that you really want your son to attend NU, and it is a great school. But really,mthere are many other options out there for engineering. Does he have any pending applications, or did you accept NU’s admission offer? This was an ED offer…when was your decision due? Did your son accept NU and withdraw all of his other applications?
I agree with Happymomof1. Perhaps a good use for this inheritance is to fund college costs. Something to think about.
Most schools will not give you need based aid so that you can preserve an inheritance for future spending.
Need based financial aid is applied for and awarded annually…for one school year only.
If the life insurance account is not sufficient to fund four years of NU, how WILL you pay for,the remaining years…or are you hoping for increased need based aid?
It sounds like he accepted NU’s ED admission offer. Is that the case?
Yes, Ed
So you have already accepted the ED offer of acceptance, and withdrawn all other applications?
If this school is not affordable, why did you do that?
We accept the admission. That is why we are planning to have my son takes gap year. And used up assets and return back to school next year after lower the financial aid family contribution
Will NU allow you to take this gap year? Ask them.
You plan to spend ALL of these assets on other things? Why not spend them on college and let this student enroll now?
You accepted an ED offer of admission, presumably to attend the school. Only NU will be able to,tell you if they will allow a gap year now.
If the life insurance money is for college (you stated this), but not enough for four years, how does spending it on your debts magically turn the zero remaining balance into enough money for four years?
I think the OP is counting on the school coming through with sufficient aid to cover the cost of attendance once their eligibility goes up (due to the money being gone). I’m not sure if that’s a safe assumption to make though; it really depends on if the school pledges to meet full need and if the life insurance money is the major factor in their EFC. I think NU does meet need, but the only risk that may come up is that their family contribution may be unaffordable even without the life insurance money in the student’s name. I would definitely recommend running the numbers with and without the life insurance money before spending down the money. If it turns out not to help that much, it may be better to put the money in a 529 plan or something instead.
Well…Northwestern does meet full need.
But the OP has enough money in the inheritance money to pay for this year…which would spend down some of that asset. He can also put a chunk in a 529 which would be assessed for FAFSA purposes at 5.6% asset allocation.
What the OP wants to do is pay all of the bills and not use any of this inheritance for college costs…thus making this kid take a gap year.
I would vote for paying for this year out of the inheritance…let the kid start now. And while the kid is a college freshman, figure out the best way to deal with the remaining asset for future years.
And yes…the family needs to know what their family contribution would be based on income only.
To answer the question in the thread title: Yes, Northwestern will evaluate your need every year and come up with a new financial aid package every year.
But something here doesn’t make sense. In your other thread, you say that your son was the beneficiary of your late wife’s life insurance policy, and that asset is making your expected family contribution for Northwestern very high ($40k). But you also say that it was your wife’s intent that the life insurance benefit would be used to pay for your son’s college. But it sounds like you don’t want it to be used to pay for college; you want to qualify for much more financial aid. (By the way, that money belongs to your son, and moving it to your name would likely be unethical and possibly illegal, depending on what exactly happens.)
How much money are you talking about here, that your son will have available to him as an annuity once he turns 18? If he spends it on the $40k EFC for his freshman year at Northwestern, he should be eligible for more need based financial aid for his sophomore year, because he will have fewer assets. The same will be true of his junior and senior year as well, as the money is spent down.
Others have suggested putting the money in a 529 account to ethically and legally have it count for FAFSA as a parent asset, but if Northwestern uses Profile that may not be of any use. Also, if the money is tied up in an annuity that starts paying out on the 18th birthday, there may not be a lump sum that can be put into a 529, unless the annuity contract allows a lump sum distribution of the balance.
Look, if I worked in the financial aid office, I would pull the file after the gap year and ask the question - where did all the money go? I think it’s a big risk to spend it on dad’s debts (is this what mom wanted?) and hope the school doesn’t figure out you spent a year gaming the system.
Have you ever heard of opportunity cost? Son begins his career one year later - what are the lost wages from that year? $40,000? How do you come out ahead?