We got an offer from Rice but the financial aid award was a lot lower than other CSS profile schools. I called to talk to the financial aid office and they told me it is because of the value of our family IRAs. Has anyone ever heard of this? I know of a bunch of schools that don’t consider your 40k as an asset but do consider the contribution in the year as part of your salary. I have never before heard of a school that overrides the recommendation, or policy, of CSS and counts the actual value of the retirement fund. Has anyone else heard of this?
There is no “recommendation” or “policy” of CSS. CSS/Profile is simply a method to collect data. Each school that uses Profile is free to use that data in any way they want to compute need-based financial aid awards.
Also, they may consider the retirement account balance and years to retirement in awarding aid. They might reduce aid to someone who has a very high balance (sheltering money) or make different adjustment for a low balance, nearing retirement age. I’m not sure if the account of someone 59.5 yrs old is treated differently, since they are legally able to withdrawn from a 401(k) with out penalty, only paying the taxes as ordinary income.
If you have very high balances, some do…perhaps they think you can borrow from it.
As mentioned, CSS has no policies. They just collect info for colleges to use as they see fit.
If someone has a lot in a 401k, IRA, or inherited IRA, etc, then why wouldn’t a full-need school consider this? Amherst mentioned a few years ago, that they would also start looking at retirement accts…don’t know if they implemented the policy or not.
Are any of the IRAs inherited? if so, don’t you have to withdraw an amount each year from each? We have 4 inherited IRAs and we have to withdraw each year.
I think schools consider these accounts in some cases when the amount in the retirement account is FAR higher than what current income would suggest.
Is that possible?
Actually, the financial aid office called back. They corrected what they said. Their policies are no different than every other college. They don’t consider the balances of retirement accounts, maybe if there were at a whack I suppose, but they do consider the money you contributed to a 401k in the year as part of your income. All of that is very common and expect it. My question related to the mistake they made her earlier. Problem solved.
The only thing CSS says this is used for is to understand your overall financial position. (In very fine print somewhere.)
All colleges that provide institutional funds for financial aid have their own policies as to how awards are determined and funds are distributed. Believe it.