Using MEC to shelter assets, pay for college

parentologist
Wed, 21 Jul 2021 15:13:52 +0000

Having recently filled out the CSS, I can tell you that it is an EXTREMELY detailed, in-depth financial biopsy. I do vaguely remember some question about value of life insurance policies that were also investment vehicles. If you have it, they will see it… unless you’re doing something underhanded to hide money.

If your husband still has college loans, seems as if you would likely be in a position to be eligible for financial aid. Unless there are very good reasons not to pay off this higher interest college debt of his, it seems that reducing the equity in your home by paying off his college loans is a good idea. The only way it would not be a good idea to do this is if the loan is solely in his name, and you’re on your way to divorcing, or he is about to become disabled, or worse, deceased, in which case federal student loans would be forgiven. If you pay off the loan with money from a refi, you lose those protections. But I’m assuming that these situations are not applicable for you.

By paying off his student loans, you will appear to have less in the way of assets. I don’t think that the CSS asks about parents’ remaining student debt, or balance on credit cards, or other debt. They did want to know about the current equity in cars - how much you paid for the car, how much it was worth now, how much you owed on them.

Most schools that give significant financial aid in the form of grants also require the CSS from both parents, and if divorced and remarried, from the step-parents, too.

Tough to get around this while remaining honest. This is the reason why most flagship state U’s have become so selective, and yet are overenrolled, year after year. So many parents whose kid doesn’t qualify for financial aid are realizing that their flagship state U for around 30K/yr is the best option, vs paying rack rate for prestigious private schools that do not give merit money, or others that give it only very rarely.