<p>What would be the best source to find a definitive answer on how different varieties of trusts affect the college financial aid formula? Elderly grandmother wants to know.</p>
<p>I would hazard a guess that if the money in the trust is accessible to fund college expenses, that will be factored as assets in finaid.</p>
<p>Would it make more of a difference on the PROFILE than the FASFA, or would it make no difference?</p>
<p>When they were infants, our children received an educational trust from their great grandmother so we have researched this quite a bit.
Unfortunately, the trust was set up in their names (irrevokable) and our understanding is that all of the money in the trust will have to be reported and counted on financial aid forms. </p>
<p>Schools will expect a higher contribution from the funds saved in the children's name through the trust than they would if that money had been put in a savings account in our name. </p>
<p>The plus is - we have the money there to pay for undergrad in any case. The con is - since the money will be counted this way by schools, we will be using it all for undergraduate and there will probably not be any left for graduate or professional programs when getting financial aid is tougher.</p>
<p>Setting up a 509 college plan may be the best route to go instead of a separate trust fund if a grandparent wants to contribute money to college savings. A good tax advisor should be able to work the details out with you.</p>
<p>I don't know the answer to the trust issue, but I think it isn't right to try to "hide" education trust funding from college financial aid offices. It's unfair to those who don't have education trust funds.</p>
<p>I agree idler, but it happens. I know that there are many grandparents that are alive and paying college expenses of grandchildren. They are not listed on any financial aid forms.</p>
<p>There can be many reasons to set up trusts which don't involve "hiding" money. That's the case here. </p>
<p>Asdad, I'm a newby at all this college financial stuff. What is PROFILE?</p>
<p>There is a line item on the FAFSA asking something like "any other source of financial support for college expenses not otherwise reported here". I'm sorry that I can't remember the exact wording (my H fills them out), but it clearly seemed to us that it was aimed at such things as trusts, grandparents' direct payments, etc. For subsequent FAFSA filings, I believe the education expenses paid during the prior year must reconcile with the sources.</p>