Will this affect my financial aid???

Paying for College
1

<p>So my father will be selling our old house really soon and will be purchasing a new apartment as well.</p>

<p>Because of family issues, in the end, half of the house’s money ($250,000) that we sold for belongs to my brother and I (both currently in college). Now my father wants to put that money as a CD. I know that CDs affect my financial aid and will lower the amount of money that I will receive but what I don’t know is what part of it affects my financial aid?</p>

<p>Does the fact that my name is under a CD affect me and my brother’s financial aid or the money given to us during maturity affect us?</p>

<p>All answers are much appreciated!</p>

2

<p>yes it will affect your financial aid enormously. 20% of assets in a student’s name goes to their EFC. If half the $250k is in your name (doesn’t matter whether it is cash or a CD) then your EFC will be increased by 25,000.</p>

3

<p>Thank you for your answer!!</p>

4

<p>I am not sure of your particular complexities, but if the money is yours you will be expected to use it for college. If your Dad sells a house for example for $500k and buys a new apartment for $250k and puts $250k in the bank, that $250 will be expected to be available for college-they will expect a larger percentage if it is in your name than his, but still it will be in the formula.</p>

<p>If you are applying for FAFSA schools they would not count the value of your home, so if that $500k house were owned free and clear all that equity would be protected. For profile they will ask home equity, different schools use different formulas for home equity protection.</p>

<p>Run your numbers through the actual formula:</p>

<p>[Federal</a> Student Aid - IFAP: iLibrary - EFC Formula Guide](<a href=“http://ifap.ed.gov/ifap/byAwardYear.jsp?type=efcformulaguide&awardyear=2010-2011]Federal”>http://ifap.ed.gov/ifap/byAwardYear.jsp?type=efcformulaguide&awardyear=2010-2011)</p>

5

<p>20% of assets in student’s name go towards EFC, what percentage of parents’ assets go towards EFC? I have seen 12% and 5.6%, what is the correct amount?</p>

6

<p>It is a maximum of around 5.6%. </p>

<p>It is a bit confusing when you look at the EFC formula because at one point in the formula it shows a calculation of 12% of assets. But that 12% of assets is added to the Available income. This creates a figure called Adjusted available income (AAI). The AAI is then used in conjunction with Table 6 in the formula to calculate the parent contribution. The maximum % parent contribution from the AAI is 47% :eek:. So 47% of 12 % = 5.64%.</p>