<p>Assuming yearly income of about $ 200,000, if a couple have a certain amount of assets ( e.g. $ 1M ?, $ 2M ?, ...$ 4M ?...), at what amount of assets does filing for financial aid become superfluous and a waste of time ? Thanks.</p>
<p>I would think an income of 200k puts you in the waste of time category?</p>
<p>Unless they will have the student take a Stafford loan, then it really doesn’t matter you still fill out the FAFSA. I can’t imagine a college would subsidize the Stafford, but some parents do want their kids to have some responsibility for the costs via Staffords.</p>
<p>Parent assets (typically investments, rental real estate and cash, but not home equity) are assessed at 5.6% for FAFSA. An asset protection allowance is subtracted first, which is around $40-$70,000 depending on the age of the older parent. So net assets of $1MM would add $56,000 to an EFC, putting the EFC well above the cost of attendance of most colleges.</p>
<p>Thanks very much.</p>
<p>There is a “quick EFC calculator” you can find with Google that will let you try out various scenarios of income/assets for your family size to get a ballpark idea of how the different factors play in.</p>
<p>I was surprised that income alone seemed to be the main driver.</p>
<p>I plugged in 200K income, 0 assets, 0 student income/assets, for a family of 4 with one in college and a parent age of 48, and the EFC comes out as 48928.</p>
<p>^^DeskPotato, I think income is the primary driver because assets often aren’t liquid…$200,000 probably puts you in the SOL category for aid. Also the more income you have the greater ability to shelter your assets from taxes and such since you dont’ “need” it until old age. Those types of retirement vehicles aren’t counted on the FAFSA and aren’t liquid without penalties to boot. CSS analyzes them alittle closer but that doesn’t help a high asset/high income person anyway. At that income level the parent/parents had many choices which comes with the road to producing ultra high income levels so the formula presumes that along the way there was college savings…or that they have a greater ability to get a bank loan if needed…which makes sense. Few people go from $40,000 income to $200,000 in one year.</p>
<p>Yes, even for the generous FA policies of HYPS, 200k/yr plus 1M in assets will put you out of range. For instance, see Ss definition of ‘typical assets’:</p>
<p>[FAQ</a> : Stanford University](<a href=“http://www.stanford.edu/dept/finaid/site/faq/index.html#faq_1]FAQ”>http://www.stanford.edu/dept/finaid/site/faq/index.html#faq_1)</p>
<p>Momofthreeboys, I can see that this makes sense. It just surprised me, because I have been hearing people in my [very affluent] area talk about the best way to allocate assets (e.g. parents’ names, child’s name, 529 plans, etc) to maximize financial aid. These are people whom I assume have a combined family income that exceeds 200K, so I figured that people at that income level were eligible for financial aid, or why would people be discussing it so much? My oldest child was probably 10 at the time, now a junior, so I really didn’t think too much about it, just kept socking away as much as I could sock away!</p>
<p>When I started playing with the EFC calculator and saw that at that income level, with ZERO assets, one’s EFC approaches the COA at most colleges, I had to wonder why everyone around here spends so much time thinking about how to qualify for aid? </p>
<p>Maybe if you have more than one kid in school at a time?</p>
<p>^^^</p>
<p>Yes, having more than one child in school at a time makes a difference.</p>
<p>Also…some just misunderstand the system. They think that if they can get their EFC under the cost of attendance then they get some free money. That rarely happens.</p>
<p>We knew we wouldn’t get anything, we knew our kids want to go to professional school (med and law) so, we they took merit scholarships, and we can help pay for prof school now.</p>
<p>I am paying full fare for child #1. Guess I will be doing the same for child # 2. All part of being a parent, I guess…lol.</p>
<p>EFC = Every Friggin’ Cent</p>
<p>;)</p>
<p>Where do your kids want to go to school?</p>
<p>simply filing the FAFSA and/or CSS profile is sometimes required by certain colleges in order to qualify for merit aid, so be sure to determine if any schools your child is applying to falls in this category.</p>
<p>MBJ…with assets in the over $1million range…did you think you child would qualify for need based aid?</p>
<p>I had my doubts…but I hear so many people say, “file the forms anyway…”, I just thought I would pose the question. At this point, I will pass on filling out such forms and focus on other things.</p>
<p>Some schools require you to fill out the FAFSA for consideration for merit scholarships as well. That ticks me off, but I guess they can require whatever they choose.</p>
<p>MBJ…If you would like your student to have a Stafford loan which is in the student’s name…complete the FAFSA.</p>
<p>My DH refused to fill out the FAFSA, says it’s a waste of time. Then last year my son’s LAC called to say he needed to get the FAFSA filled out. I think we missed some merit awards. Ouch!</p>