I will have a 2nd child filing the FAFSA this year and have a few things I want to be sure I understand.
T or F: I only need to file for 1 FSA ID. Each of my children will need to apply for their own.
D13 co-ops and therefore has money in savings. How do they calculate EFC. I know the co-op earnings don't count as income but how will her savings be counted? Will assets be pooled or will they split the parental assets and then apply the individual student's assets?
Will money in the 529 accounts be pooled or will they apply the assets to the appropriate student?
Interesting question with the 529 accounts. Normally, a parent-owned 529 account is reported as a parent asset even if the beneficiary is not the student for whom the FAFSA is being completed (for instance, the beneficiary is a younger sibling who is not in or yet applying to college). If the 529 account is student-owned, it is not reported on a sibling’s FAFSA. So my guess is that if the 529 accounts in your situation are parent-owned, they will both be reported on each child’s FAFSA (i.e. they will be pooled, because the parent owner has the discretion to modify beneficiaries). If the 529 accounts are student-owned, they will only be reported (as a parent asset) on the FAFSA being completed for that student (the funds are not available for a sibling).
They are not considered income for FAFSA purposes. At least they weren’t last year. There is a separate line for coop earnings on the FAFSA report. At my D’s school it is a class and is therefore part of her education.
[QUOTE=FAFSA] This is question 44f on the FAFSA.
The response indicates the total amount of taxable income the student earned under a cooperative education program in 2014. Any income earned from work under a cooperative education program offered by a postsecondary institution is excluded from need analysis in the determination of the Expected Family Contribution (EFC).
^^
Does that also mean that the SAVINGS is excluded? or just income? (meaning that it won’t be double counted?)
If the money is counted when it sits in savings, then put the money in a 529.
@kelsmom Can you answer if the co-op earning that end up in savings is counted as a student asset? or is it excluded like it is for income?
529 assets are considered parent assets, as if they were your (the parents) savings acct. So, if there is $100k total, then $100k gets counted as an asset on both FAFSAs. However, you will indicate that there will be 2 in college.
I just signed up for my FSA ID and it was a pretty straightforward process, I had my PIN from last year and entered that when prompted. The main problem was coming up with 5 questions/answers for the security questions.
After you submit info you get a confirmation email and you have to enter a code they send you within a certain timeframe so it’s probably best to have both kids do theirs over Christmas break so you can help if necessary.
Everyone needs to use a different email address.
And write the info down somewhere safe so you have it for future years’ FAFSA, applying for student loans, etc
@mom2collegekids I know the savings is included in her FAFSA. What I want to know is when they are calculating EFC can D13’s be different than D16’s because of the additional savings D13’s account. I think the answer is yes but never having two students attend concurrently before I just wanted to be sure.
We can put D13’s savings into a 529 account, though she doesn’t have too much left right now because she used it to pay off the student loans she got her freshman year. 2016 may be quite different because she has two full co-op sessions and will only be in class over summer semester. If we put it in a 529 my understanding is that it would be considered part of the parents assets and apply equally to both children. I guess at 5.64% it would be better for D13.
It might be determined by what kind of merit aid D16 gets. If she needs more need based aid then how to distribute the assets may come into play. All in all a good problem to have. The co-op has been a tremendous help in financing D13’s education.
Earnings from co-op are reported in AGI but are excluded from the formula through the answer given in 44f. However, any earnings from co-op that are in the bank at the time the FAFSA is filed are considered assets. (Loans & Pell are “financial aid” & so are not reported if in the bank … co-op earnings are a “financial resource” & are reported.)
<<< @mom2collegekids I know the savings is included in her FAFSA. What I want to know is when they are calculating EFC can D13’s be different than D16’s because of the additional savings D13’s account. I think the answer is yes but never having two students attend concurrently before I just wanted to be sure.
We can put D13’s savings into a 529 account, though she doesn’t have too much left right now because she used it to pay off the student loans she got her freshman year. 2016 may be quite different because she has two full co-op sessions and will only be in class over summer semester. If we put it in a 529 my understanding is that it would be considered part of the parents assets and apply equally to both children. I guess at 5.64% it would be better for D13.
It might be determined by what kind of merit aid D16 gets. If she needs more need based aid then how to distribute the assets may come into play. All in all a good problem to have. The co-op has been a tremendous help in financing D13’s education.
<<
Yes, often the resulting EFC’s for each child ARE different because one child has more earnings or more savings.
If DD13 doesn’t have much, then it may not matter much. She may find something else to put the savings towards before FAFSA is filed.
Does she get any sort of refund from her school aid that goes towards books, etc?
Even if 529 counts as a parent asset at 5.64%, since EFC splits, wouldn’t the overall effect be half? less than 3%? If so, and the amount isn’t much, it would seem that it’s easier to “make up” any EFC loss for the other child rather than suffer a larger student rate against one child. Does that make sense? I’m just shooting from the hip here…lol
Coop earning child could also open an IRA to shield some from income taxes also. My D had to file federal and 3 state income tax returns (mix of resident and non resident forms).
She has a Roth IRA. She doesn’t put a lot into as of yet but she’s far ahead of where I was at 21. Actually having any money in savings would be far ahead of where I was. Thank you for the answers folks. I think D16 will be more of a financial challenge. Less opportunity to make money to apply to her education and she will require 3 year of post undergrad work. She is looking to be a Physical Therapist. I’m hoping for the Baylor Army DPT program! One can dream:)
