<p>We have a savings account that is earmarked for our property taxes. We do not escrow our prop taxes in our mortgage payments. Would we be better off refinancing our mortgage to include property taxes, so that savings account doesn't count against us? We live in a high tax area.</p>
<p>Pay the taxes a couple of days before you file the FAFSA so that money isn’t sitting in that account. Really, that’s all you have to do. You could inherit a million dollars the day after you file the FAFSA and it wouldn’t enter into the calculations until the next year. Your bank and investment balances on the day you file are what matter.</p>
<p>If you do choose to refi and close that account as a result, or just pay your taxes ahead of filing FAFSA as happymom suggested, you’ll probably only be marginally better on your FAFSA EFC unless there is a substantial amount of money in the account. IIRC, a parental savings account would be counted at a 5.6% rate towards your EFC. Parental income usually has the biggest impact on FAFSA EFC.</p>
<p>If you do choose to refi, that would possibly impact your situation more positively simply by giving you additional cash flow each month that you could put towards college expenses. Good Luck!!</p>
<p>Wolverine86 brings up a good point about income and the FAFSA. Print out the current formula, and run your numbers through it with a couple different scenarios:
<a href=“http://ifap.ed.gov/efcformulaguide/attachments/091312EFCFormulaGuide1314.pdf[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/091312EFCFormulaGuide1314.pdf</a></p>
<p>For your peace of mind, you should also run the Net Price Calculator at the website of each of the colleges/universities on your child’s list. That will give you a more solid guesstimate of what each place is likely to expect you to pay.</p>
<p>When you fill out your FAFSA/PROFILE, that day your student should have a big fat goose egg for assets if possible and you should have as little as possible as well unless you are an auto zero. 20 cents of every dollar your student has will go towards the EFC. Parents have an exclusion allowance and it’s 5.6% of assets which isn’t bad, but if you have $10K in tax money sitting in your account thats $56 right there on your EFC that is not necessary. Pay day is definitely the day to fill out these forms. Pick a day when you are dry,dry, dry. And if for whatever reason you have temporary money in there, pre pay some thing that you know you will need to do. Or give me a call and I can give you a place to donate some of those goodies.</p>
<p>Yup–I paid my taxes ahead for as many quarters as I could before I filled out the form!</p>
<p>Parents have an asset protection allowance that’s based on the age of the older parent. It’s around $50,000. If your assets fall under the allowance, then you don’t need to worry about your savings account because it won’t affect your EFC. Anything over the protected asset amount will add 5.6% to your EFC.</p>
<p>See table A5.</p>
<p><a href=“http://ifap.ed.gov/efcformulaguide/attachments/082511EFCFormulaGuide1213.pdf[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/082511EFCFormulaGuide1213.pdf</a></p>
<p>Is a goose egg a lot or a little?</p>
<p>A goose egg in my day was a big fat zero.</p>
<p>^ haha ok, I was visualizing something entirely different :)</p>
<p>Thanks for the great answers! Definitely a big help.</p>
<p>So glad I stumbled upon this knowledgeable community :)</p>
<p>By assets or savings, do you mean all non-retirement accounts? Not just a savings or checking account, but also all other mutual funds that aren’t in a 401k or IRA?</p>
<p>Yes. All assets that are not in an account defined specifically as being for retirement (IRA, 401k, 403b, retirement annuity, Keough, etc.).</p>