I’m applying to Rice University, and among the other privates that I’m applying to, they require a financial aid statement (you know, with the bank account info, assets, etc).
Let’s say, for argument’s sake, that I have $200,000 in savings. With this money in hand, I’m planning to buy a house, and use a portion of it for college. (Say ~$75,000)
When I declare my savings, must I declare only the amount I wish to spend for college?
This may be untrue, but I envision a financial aid officer saying " But you have so much money! You can easily fund your kid’s education," which is the last thing I want because that kind of logic is just plain stupid. You can’t expect people to pay up all their money on college alone! What will they do after that? Live on the edge?
One more Q: Do colleges/FAFSA take into account the fact that we pay a huge chunk of our earnings on rent?
You have to declare it all as of the date you fill out FA forms. They don’t expect you to pay it all, but will assume a percentage is available for college. What they assume depends on whether you are the kid or the parent, and also may depend on the school. Even if you buy a house now, some schools consider home equity as well as cash in the bank, and if it is a second home, may treat it differently from a primary residence.
In general, income matters more than assets in their calculation of your need.
Yep…the date you complete your financial aid forms…ALL money in any account, under your mattress, in jars buried in your backyard…anywhere that’s yours…MUST be included on the forms.
In regards to your rent…no that will not be considered…at all. Everyone has household expenses…either rent or a mortgage. Not considered…at all by the colleges in the financial aid equation…and there is NO PLACE to even put your rent on the forms.
If your parents have assets, those WILL be used as part of the need based financial aid calculation.
And some colleges use part of primary home equity in their calculations as well. Not sure what the Rice policy is.
Did you run the net price calculator on the Rice website? If not…get that done now. It will give you a very good estimate of your net costs…unless your parents are divorced, self employed or own real estate other than your home. Oh…and if you are an international student…the NPC won’t be particularly accurate either.
If the net cost is too high…hoping you have some affordable options on your application list.
Also failure to be truthful could possibly be a fraud charge if you are caught. There are instances of this happening so be honest because they can also audit your application for aid.
Very little compared to the asset is expected to be contributed. If it is in a Roth IRA or other retirement account I don’t think it would even be part of the asset calculation for FAFSA.
The 5.6% assessment on assets is a FAFSA number. Schools using the Profile can assess at any rate they chooose.
Still…this student and parent need to report ALL assets they have. The can’t make up numbers or omit amounts just because they feel like it…or don’t want to spend anything on college.
It’s fraud to knowlingly report info incorrectly on the financial aid forms and receive Aid…fraud.
Correct. As a profile school, they will look at both parents income, investments, home equity, and wil look at a higher portion of your savings to be expected to be contributed to your college costs.
Why are you subtracting $35k from the $200k in assets? If that is for the parent protection of assets, that’s just an estimate based on age and marital status. A single person would have a lot less in protection (about $12k). The OP may have other non-cash assets also so that protection allowance may be spread thinner.
You need to declare it. We had saved a good deal of money for college – certainly it would have been nice to not declare those funds and give our kids the money so they could put a down payment on a house instead – but that isn’t the way it works. We were happy to get them through school debt free and they will have to work to save up for a down payment on their homes.
The linked article has charts and is a good primer for people filling out the forms for the first time or wanting to understand the different ways income and assets are used to figure EFC. The OP hasn’t even stated whether it is parent or student assets, whether or not student is dependent or independent. Agreed there are a lot of nuances to how EFC is calculated. But I run into people all the time that think not saving for college is a good strategy because they fear anything they save means their child won’t qualify for FA even though most of them will only qualify for loans anyway because of income. If more people knew how it worked (even in a general sense) then they’d be better prepared.
