<p>We don’t want to misrepresents FA forms so would like to know what non liquid assets are considered. </p>
<p>Since liquid assets are documented as part of banks or brokerage firms and you get Income statement that go into the tax forms.</p>
<p>We want to convert the liquid cash into some form of asset that won’t get reflected on the forms as with present reserve the EFC increased by $14000.</p>
<p>My understanding is that FAFSA does not include such things as gold/silver/antique furniture/vehicles/jewelry/oriental rugs/collectibles and such as assets (I am not sure about Profile – I believe they do ask about vehicles, not sure about gold/silver).</p>
<p>The problem you might have is in the conversion – I think that if you cash out stocks/bonds to buy gold, it will show as income for that year and your EFC will be effected.</p>
<p>The absolute best way to utilize any assets to decrease their effect on EFC is to pay off any debts. There is no allowance for debt (with the exception of mortgage and student loans) so you want to use your assets to pay off cars, credit card debt, etc.</p>
<p>as you probably know, funds placed in an official retirement account are not considered available to pay for college and do not impact the EFC</p>
<p>Cash value life insurance is not considered a FAFSA asset, nor are bonified retirement accounts. </p>
<p>If you have any credit card debt or consumer debt, paying that off is smart for FA. Paying down your mortgage is also a way to reduce assets available for consideration, for FAFSA schools. Profile schools are entirely different.</p>
<p>Vehicles, furniture, art, possessions, etc are not counted in FAFSA, I would imagine “investment” grade art & gold, etc would need to be considered, but since that does not apply to me, I am not sure!</p>
<p>You can do your own FAFSA formula here:</p>
<p>[IFAP</a> - EFC Formula Information](<a href=“http://www.ifap.ed.gov/efcinformation/0809EFCFormulaGuide.html]IFAP”>http://www.ifap.ed.gov/efcinformation/0809EFCFormulaGuide.html)</p>
<p>That will show you the asset protection allowance for your age. Remember, if your income is too high, there is no sense going illiquid if you won’t be getting any aid and you will need that money for college.</p>
<p>Smart of you to review it all ahead of time and get an idea what to expect.</p>
<p>We do understand paying off debts but we don’t have any. But it seems we won’t be getting any aid too as it seems to inlcude 401K contribution for the year too and even if I don’t go back to work the minimum our AGI will be around $170K for this year so it seems useless now to do any such thing.</p>
<p>Thanks for all the replies.</p>
<p>Investment grade gold and silver are considered assets. You can hide them more easily, but if you want to be straight with the FA forms, you will need to report them. Whether you do is between you, your conscience, and anyone who might audit you.</p>
<p>'What if the family recieved an inheritence and has around 80k assets in CD’s, stocks, checking account,etc. Are you saying in order to reduce the EFC they should pay off all credit cards, home equity loans and part of their mortgage? That will reduce their available cash to pay for the college, but then again they could always dip into the HELOC again to get the cash out. I’m trying to find the asset protection age on the form right now, to see what available cash can be declared. It’s a catch 22.</p>
<p>It seems like asset protection is around $40-$50,000 so if you have $80,000 sitting in the bank and you can pay off consumer debt, that should help in either FM or IM, though a Profile school may ask about those cars, etc.</p>
<p>And yes, paying down any HELOC would be good, as you can reaccess that money- unless your bank is one of the ones freezing it.</p>
<p>Run your own version of the formula to see if you are even eligible for aid- Pell/ACG/SMART and then any state grants. If not it is ot worth it to run your accounts down when you need the money for college. However if you are so borderline that say, paying off a car would make you eligible for a small Pell grant which makes you a candidate for ACG, the ACG is $600-700 the first year, about $1300 the second year and if your student is a math science kid with a strong GPA, another $4k per year, even if the PEll grant is small.</p>
<p>Therefore, if that one pay down would make you eligible for a Pell, you can add on almost $10k in ACG/SMART IF IF IF your student would qualify. It is probably a small percentage of students who are eligible for those and who have income low enough to qualify for a Pell and who also have assets other than home equity which would put them over the benchmark.</p>
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<p>Well…sort of. The funds you place IN your retirement accounts for the tax year used for the FAFSA/Profile ARE added back in as income on both forms. So…for those applying for financial aid in the 2009-2010 school year, the tax year used would be the 2008 year. Any retirement money contributed in 2008 WOULD be counted as income. The value of retirement accounts prior to 2008 is NOT considered an asset (some colleges using the Profile to ask for the value of retirement accounts as a supplemental question…but no one seems to know what, if anything, they do with thisinformations).</p>
<p>
For FAFSA asset protection for 2008-2009
<a href=“http://ifap.ed.gov/eannouncements/attachments/0809EFCFormulaGuide.pdf[/url]”>http://ifap.ed.gov/eannouncements/attachments/0809EFCFormulaGuide.pdf</a>
Table A5 - page 19</p>
<p>Eh, I figured I’m screwed either way. I’ll just have to use the money to pay for the college. Then I won’t have any assets left anyway! And you say you can’t even save for your own retirement, double screwed!</p>
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<p>You can save for your retirement…it’s just that the amount contributed in the tax year used for your finaid forms is added back in as income.</p>
<p>Of course you can save for your retirement. You just can’t use the contribution in THAT tax year to reduce your income.</p>
<p>Many folks continue to pay into their retirement with the idea that they will use some other kind of loan to pay for college. You CAN pay loan debt payments with retirement income one you retire…but you need to try to keep your payments to a reasonable amount for your family.</p>