<p>I am trying to figure out whether it pays to file the various paperwork for financial aid. My S goes to Emory Univ., a costly private school. My D will likely start an OOS state school next fall, probably costing in the mid-30s. If assets do effect potential financial aid, any idea over what amount renders financial aid out of reach ? ( e.g. $ 1M, 2M, etc..?? ). Thanks.</p>
<p>Yes assets affect your EFC on which financial aid is based. There is a certain amount of (parent) asset protection based on the number of parents and the age of the older parent (currently the lowest asset protection is $1200 where there is one parent aged 26, yes weird to have a 26 year old parent of a college student, and the highest is $84,000 where there are 2 parents and the older is 65+). There are also a couple of assets that are do not have to be reported - the primary home and retirement accounts such as IRAs and 401ks. </p>
<p>Reportable assets over the protected allowances affect the EFC by around 5.6% of their value. In most peoples cases income would affect the EFC by more than assets as from 22% up to 47% of income (over protected income allowances) can affect the EFC. But in cases where there are large assets they will certainly have an impact. For instance $1M in unprotected assets would increase the EFC by around 56,000 which would make aid unlikely at any OOS school as their COA would be below that. Student assets will also affect the FAFSA EFC - they have no asset protection allowance and affect the EFC by 20% of their value.</p>
<p>When you have 2 in school at the same time the part of the FAFSA EFC generated by parent income/assets would be halved.</p>
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<p>The above is true for the filing of the FAFSA. FAFSA has no place to indicate anything about retirement accounts or anything related to primary homes.</p>
<p>HOWEVER…if the school requires the PROFILE, the equity in your home is one thing that must be noted on the Profile. Schools use varying amounts of this to compute disbursement of institutional aid…varying from no home equity used to a cap on a %age of the home equity. </p>
<p>In addition, some schools have supplemental Profile questions…and one IS about the amount in your retirement accounts. No one is really sure how that question is used…but it IS there for some schools.</p>
<p>FAFSA is primarily used to compute federally funded need based aid. However, many school use only the FAFSA for disbursement of ALL aid.</p>
<p>The Profile is used by about 300 or so schools to compute their disbursement of THEIR money…institutional aid.</p>
<p>I’ll take a shot in the dark & guess that any assets $1 million & over will make need based aid unnecessary. However, it depends on the assets. If it’s boats, minks, jewelry, etc. no one will be the wiser. If it’s tied to a business with fewer than 100 employees, it’s not reported. If it’s trusts, bank accounts, vacation homes, rental buildings, etc. it’s reportable on FAFSA & Profile (Emory is Profile). If it’s retirement & primary home it is reported on Profile, but as mentioned, no one really knows for sure exactly how that works.</p>
<p>Liquid assets over a million will get your efc around $80k to $100k (don’t remember the exact amount). That would just about put you out of range (assuming $50k + $30K) for financial aid outside a small Federal loan. I would suggest looking at merit aid if you really want a discount. It is possible with some OOS schools.</p>
<p>If you have $1mm in reportable assets, the contribution of those assets to your total EFC will be $56,000. Your asset protection allowance (which is age-based) is subtracted from the $1mm before multiplying by 5.6%.</p>