Hello! I currently have 33k in assets in my name (I’m the student) which were given to me by my grandfather. I know that student assets are counted for more in financial aid calculation, and as a result when I run the Net Price Calculators for the schools I am applying to I end up with about 8k more in tuition then my EFC. When I run the calculators with my assets taken out they hit my EFC almost exactly. I was wondering that if my assets are used to pay for part of my first year at university, and thus depleted, do colleges recalculate aid accordingly so that the aid for my following years in school would match the NPC cost w/o assets?
The EFC formula uses the higher amount for your assets.
The NOC uses the school formula.
Do your colleges guarantee to meet full need for all?
put your savings in a 529, then they will counted as parent assets.
But remember that 529 funds not used for college exoenses will be subject to a penalty upon withdrawal.
Yes, the colleges do promise to meet full-need.
@mom2collegekids Is it possible for me to do that if I do not have control of these assets till 18/21? These assets are investments in my name, not straight-up savings.
Then have whoever Does have control of them invest in a 529. Explain what happens in the FA calculation
Whoever is acting now as custodian of those funds can liquidate them and put them in a custodial (student owned) 529 account that will be considered by FAFSA as a parent asset. If the colleges that you’re looking at promise to meet full need, then it’s likely that they require the Profile form in addition to FAFSA. Profile schools may or may not treat student owned 529 accounts as a parent asset, so you might want to check with each financial aid office on that school’s policy.
Two things:
-Liquidating the current funds may incur capital gains taxes, depending on how they are invested, so that may be something to think about. But, it might be a moot point if you were planning to liquidate them anyway to cover college expenses.
-The penalty that thumper1 mentions above for 529 funds not used for qualified education expenses applies only to the earnings portion of non-QEE withdrawals, so depending on how the investment performed and the time frame, a penalty may not add up to very much.
I thought thre 529 would have had to been started by 12/2015 for it to not count this year?
No. 529 accounts are reportable assets. Assets are reported as of the day that FAFSA and/or Profile is submitted. You could fund a 529 on Monday and submit FAFSA on Tuesday reporting the 529 account.