<p>I believe FAFSA uses a formula regarding savings that is different for students and parents. For example, I believe 35% of a students savings is considered money they should put towards their education. </p>
<p>Any idea how a joint account (student and parent) works as far as FAFSA/EFC is concerned? </p>
<p>I am considering opening a joint account for my DD as a HS graduation gift. To further complicate things I am divorced from DD's father so FAFSA doesn't even know I exist!</p>
<p>It is 20% of student assets. And only assets as of the day of filing FAFSA.</p>
<p>The FAFSA instructions don't specifically adress joint accounts but do have the following about joint assets (which i would think would be the same)
[quote]
Ownership of an asset may be divided or contested in several situations:</p>
<pre><code>* Part ownership of asset. If you (or your spouse) own an asset with others and therefore only own a portion or percentage of the asset, you (or your spouse) should report the net asset value that represents only your share of the asset owned. You would determine the current market value of the asset, reduce the value by any outstanding debt, and then multiply the net asset value by your ownership percentage. This result is then reported on the FAFSA.
[/quote]
</code></pre>
<p>So she would report as 'her' assets the portion of the money in the account that is hers on the day she files FAFSA.</p>
<p>We have a joint account with our daughter but it is only really joint for the convenience of us being able to do transactions on her behalf when needed. So we report it as her asset on FAFSA.</p>
<p>I'd report it as yours if you opened it with your social security number, and hers if you opened it with her social security number. Joint ownership means there's not "yours" and "hers" once it's in the account.</p>
<p>I have no authority to cite for this proposition; it's just my opinion.</p>
<p>Chedva makes a good point. The interest on my daughter's account (pitiful though it may be!) comes to her on her SSN as that is the number the account is in. So I think his approach is probably the correct one.</p>
<p>We opened a checking account, joint with our DD so we can provide her money to pay school bill, the interest comes to our SS# and the money is our money, just accessible to her, so I report it as mine, not hers.</p>
<p>DD has a savings account and it is her money from work, that is reported as hers</p>
<p>Chedva is correct. We have a joint with S TIN. Missed the small 1099-int on his tax filing and was later corrected by IRS and FAFSA readjusted the data input. Net result was no affect on EFC for $2.00 bank interest .</p>
<p>Called FAFSA and was told whoever's SSN is used (and reports the interest, if interest, for taxes) reports the account so if you want it to be reported as parent assets, then use parent SSN when opening. Makes sense.</p>
<p>"We have a joint with S TIN. Missed the small 1099-int on his tax filing and was later corrected by IRS and FAFSA readjusted the data input."</p>
<p>If checking/savings account earns interest, the person with the SSN has to report the income on taxes so if kid gets the 1099, then it's inconsistent to call it a parent asset. We got rid of bonds years ago, but I think there was a similar situation if co-owners. I think it depended on whose SSN was used. I remember friends "forgot" to report their kids' bonds because they didn't think they counted until they were cashed. But found out later that wasn't true and had to go back and report them on the FAid stuff. Didn't make a big difference and they didn't want to take a chance of doing it wrong and maybe having their Faid taken away.</p>
<p>We report the bonds as assets (including interest) on FAFSA. Are we supposed to report the interest as income? I didn't think that counted till you cash them.</p>
<p>oops. maybe I said it wrong. You are correct; they would be assets until cashed. You can find the current value of them using one of those online calculators. Some people just forget about them, having gotten them when the kids were babies.</p>