I recalled reading a thread last year about a student who has $9000 saving and was assessed for the EFC. When I filled out fafsa for DD, she has $250 from her saving account and I noticed one college put her contribution to the EFC as $50 (I assumed it was from $250 * 0.2). I am wondering whether other parents have their kids spent the money before filing for fafsa? and how does a teenager’s earning affect his/her financial aid?
Yes, the student’s saving and earning would be counted in EFC even more so than family asset. Note that you report the asset as a snapshot.
Yes…student assets are assessed at 20% of the value on the date of the fafsa filing.
But really…in the vast majority it cases, this isn’t going to make a big difference in terms of student need based aid. Most schools don’t meet full need.
for $10,000 in assets, that would be $2000.
This could be a deal breaker if it makes the student EFC too high for something like a Pell grant.
If it’s a huge concern, put the money in a 529 account…which is assessed at the 5.6% parent rate.
If the student doesn’t even earn enough to be required to file a tax return, then that income will not affect FAFSA EFC.
A dependent student gets an income protection amount, for the 2017/18 FAFSA this it was $6,420 I think.
Also they get deductions for federal, state and soc sec tax paid.
If a student earns money from work study, that is also excluded from student income for FAFSA EFC calculation.
Yes, student assets are assessed at 20% towards FAFSA EFC.
But most of the time that doesn’t have a big impact.
Like thumper said the money can be put into a 529 account for the student and FAFSA will consider it a parent asset.