What the parent could do, is open the 2014-15 FAFSA and put in info and save/print that out to see if he’s made any mistakes…that would give a good idea.
i think the asset protection has dropped a bit now…I think it used to be about $45k…now it’s $26k…so add about $20k to your assets when doing the old one.
Funny I just found the formula guide the same time you posted. I will fill that out taking my time then signing in online. I read somewhere that I can’t change assets. I may have to wait to see SAR to see what exactly I entered. Stupid not to write down what I entered.
Home equity for rentals about $100k. Two kids with 529s about $20k each. Do I count younger child’s 529 under parent assets?
So instead of living here on our military post, if we had used that $500k to buy a house and lived in it, it would not have been counted here? Too bad we didn’t realize that two years ago when we moved here. We could’ve then sold the house when we move and gotten the money back correct? That $500k was supposed to go towards our eventual dream retirement house. Guess now we spend it on son #1 or force our son to pick one of the colleges he was offered a full ride.
And I guess if we had decided to live large and spend that $500k rather than live frugally and save it, we would’ve gotten financial aid?
Thank you for taking the time to answer all my juvenile questions.
You can and should change assets if you made a mistake, forgot to include something, mis-valued something as of the day you submitted the fafsa etc. You can’t change them because of day to day changes in value or cash flow reasons.
If the parents are the owner of the siblings 529 it should be included. Beneficiaries can be changed. Yes, they are parent assets.
Yes there is some truth to what you said. However, if all the money is in a house then you would most likely not have the options you have now. Most colleges do not met full need. Many of us turn down the first choice when we are full pay due to savings.
RDtsmith, yes, if you had that $500K in your primary residence, it would not have counted as an asset on FAFSA. Nor would it have counted, had you spent it. BUT… it would not necessarily mean you’d have gotten more financial aid. There isn’t a school out there that guarantees to meet need as defined by FAFSA EFC. The vast majority of schools gap, and many of the gap big time. So you can have a zero EFC, and all you are guaranteed is the max PELL grant of about $5700 and freshman year Direct loans in the amount of $3500 subsidized,with another $2K nonsub. (with NO need your student can still take out that $5500 in Direct loans on an unsub basis).
What would happen for certain, is that you would lose the flexibility that the half million now gives you. You can buy a lot of opportunities with that kind of money. If your really feel you are losing out that badly, you can have your student take a gap year, and spend or give away that half milion and live the reality of not having that money. I’d take the money any day.
The schools that tend to meet full need tend to use CSS PROFILE, and most of them do include primary home equity, if that makes you feel any better.
Any 529 plan that is owned by a dependent student or the dependent student’s parent is reported as a parent asset on the Fafsa. This includes the 529 plans for siblings. However for PROFILE schools, the ownership of the 529 can be crucial as some of them will include 529s owned by the student as a student asset which is hit up at a higher % than parental assets.
Thank you. Your post made me feel better:-) You’re right. Guess we can choose to spend what, $300k or so to send him to an Ivy OR full ride at second and third tier schools. If my husband wasn’t close to possibly retiring, the first option would possibly have some attraction to it. Uggh. I’ll still double check all my figures.
I’ve been texting with my dad and he’s having a fit. No dad there isn’t a place to move those assets to stay protected. Don’t you think everyone would be doing that strategy then?
I’ve learned a lot today and so appreciate your help.
And education.
You can give your dad or anyone those assets,but take the inherent risks in doing so. Can’t lend them, but outright give them away, yes, you can. There is no look back period for this sort of thing. As I said before, you can give away the assets, and to anyone you please.
Too late for this year if she has already filed FAFSA.
Yeah, granddad or aunt or whoever that you absolutely trust that does not have college age kids could open a 529 to benefit your kid, and you could give them the money (within limits I think). That would then be money owned by that person and “invisible” to financial aid calculations. Of course the risk is you no longer have any control over that money.
We don’t have any living parents nor close family so it was never an option for us.
But when money is paid for college expenses from a grandparent or aunt owned 529, it is reportable the following year and will be counted toward EFC at the student income rate.
The money does not have to go into a 529, and if it does, there are those issues when the money is spent. The money can outright be given to Dad or anyone, for that matter. It can be shredded or burned. It is illegal and fraud to hide it under a mattress, or have someone “hold” it for you with the understanding it’s still your asset or to lend it to anyone and not report as still an asset. But, yes, you can give it anyone, but the downside are the risks of giving even Dad that kind of money and all the gymnastics required to protect it from death, dealing with tax implications of the earnings, access issue, etc, etc.
Yes, the younger child’s 529 counts as a parents’ asset…otherwise people would shove everything in a younger child’s acct.
Like I said, you could now open the 2014-15 FAFSA and put info in there, print that out, and see what EFC you get.
I highly doubt that the ivies or top schools will only charge you $20k-30k per year.
Exactly we’d be paying full retail price.
In reading stats for Harvard and other top tier private schools you have the high income parents…what are those? $200-300k+ income a year who can fund their kids college out of their paycheck. then you have the sub $100k parents’ kids who get nice financial aid packages and then you have the midrange who won’t get aid but are expected to use their assets to fund college. I’m betting these private schools have large percentages of kids at either end…but no “middle class” right?
I think H and other well endowed schools do have a fairly healthy “middle class” because their FA extends so far (last I remember is 10% up to $150K of income). It’s the less well endowed schools that can’t do that where parents have to take out loans. There is some variation among private college costs but not nearly as much as the public Us.
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think H and other well endowed schools do have a fairly healthy “middle class” because their FA extends so far (last I remember is 10% up to $150K of income).
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That is with “normal/average” assets. Having $600k+ in non-retirement assets is likely not considered average.
Yes but apparently if you have the assets, the income range does not matter? If my husband loses his job tomorrow and has no income, they will still count those assets, so even with a $50k income, we still would not get aid in this scenario? Sorry for being so dense! I am just trying to understand it all. And am I guessing correctly that GI Bill money I hope can be put towards the parents’ EFC…I had almost forgotten about that, which should be $20k a year transferred to our children. I think it’s the cost of instate tuition, so I guess it’ll be different depending on state? So much to learn…
I"m just talking in general @mom2collegekids, meaning those with a middle range income (not taking into account assets as some will have assets and some won’t), will not get aid nor can they afford to pay for college strictly from income…that’s what I’m trying to say…so I would think that the students whose parents in that income range will have smaller numbers at top tier and Ivy schools?
What’s considered “average” for non-retirement assets, does anyone know?
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And am I guessing correctly that GI Bill money I hope can be put towards the parents’ EFC
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I don’t think so. I think that reduces “need”. Of course if you have no need, then it reduces your costs.
If my husband loses his job tomorrow and has no income, they will still count those assets, so even with a $50k income, we still would not get aid in this scenario?
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No or low income? then likely you would get some aid even with those assets. But schools don’t give aid based on “what might happen.” They would address that if it happened.