<p>My son was recently offered a financial aid package that include 28K EFC and 28K combined grant, loan, work study package. 28K EFC is way out of our league in terms of what we can pay (it's more like 8-10K). We wil need a second mortgage on our house to do it. </p>
<p>My husband is enlisted military and is considering using his GI bill to help with the EFC part - however, the financial aid letter indicates that any outside aid or scholarships will reduce the 28K grant package dollar for dollar. Also, my mother has offered to move money into a 529 to help pay the EFC and again, the letter from the college indicates that outside aid would reduce his aid package. </p>
<p>So does this mean that we should not use the GI bill or 529 money since it won't help our EFC amount? Would it be better for my mother to give us cash (as a gift) so that his aid package doesn't get reduced and we use that cash for the EFC portion?</p>
<p>This makes no sense...we have a large EFC, yet it we want to use GI bill or grandparent gift in 529, he gets penalized in the amount of aid and we are still expected to pay the full efc.</p>
<p>Also, if he gets any scholarships, that also reduces the aid pacakge. So what's the point of him applying for scholarships?</p>
<p>Any suggestions on how to reduce the EFC (not the aid offer) and should we use the GI bill or save it for later?</p>
<p>The 529 from a family source is not outside aid. It’s actually part of your EFC. You might want to make sure it’s nearly empty before filling out next year’s FAFSA. Which it should be, from paying both fall and spring bills during 2011.</p>
<p>I’m not familiar with the GI bill, but if it’s really your husband’s money and he can use it for your son, that might not count as outside aid either.</p>
<p>Generally, outside aid means funding from outside the school that your son applies for. Doesn’t the aid letter define it more precisely?</p>
<p>The 529 wasn’t listed on the original FAFSA or CSS info since the beneficiary was someone else. Now if my son is named as the beneficiary of a 529 owned by his grandmother, won’t the school reduce his aid package by that amount?</p>
<p>The letter states, “Any outside scholarship, loan, benefits, or gifts awarded to you must be listed. If you receive these, you loan/work study will be reduced first and then a reduction to the grant will follow.”</p>
<p>The GI bill has benefits that can be “assigned” by my husband for use by my son. He would basically be transferring his benefit to his son. This was also not listed on the original FAFSA or CSS profiles because he was not planning on transferring those benefits. And he doesn’t want to transfer them if they won’t be used towards the EFC directly.</p>
<p>This is very confusing…</p>
<p>Call up the financial aid office of the school and find out if any outside scholarships will reduce the grants in the package or if it will simply reduce the loans. I would assume that part of the package is 5500 in Staffords, some of which are not subsidized, and sometimes that is what the school will reduce, or the work study or other non grant part of the package. If it is indeed a dollar for dollar reduction on the grant, you need to do some creative finagling. </p>
<p>Basically, for the GI bill, you can draw up loan papers for him to borrow the amount out of the Gi Bill from his father with repayment terms in the future. The loan can be forgiven in the future. with the What a lot of people do with the 529 benefits if it’s in grandmom’s name is wait until senior year and deplete that account so any withdrawals are not counted against financial aid. So deplete the GI bill monies first as a loan from Dad, and then have senior year paid by the entire amount of the 529.</p>
<p>Grandparent-owned 529s are not reported on FAFSA. </p>
<p>For Profile, grandparent-owned 529s that are for the benefit of the student are reported, so the college would have that information already via the Profile form if there had been any 529s in place in 2010. Sounds like there weren’t. If the grandmother changes the beneficiary of a 529 from one grandchild to another, the asset would be reported by the new beneficiary the year after the change was made. In other words, if the beneficiary was a different grandchild in 2010 and then transferred to your child in 2011, you would report that on the 2012 Profile.</p>
<p>Usually funds in 529 accounts don’t reduce aid 1-for-1 as there’s an expectation that the 529 funds will be withdrawn over the course of 4 years of college. There are exceptions to this general rule, so I agree that a call to the school would be advisable.</p>
<p>Unless you have actual cash in hand, either in the form of a gift to you or your child, or a 529 with the child as the beneficiary, I don’t think anything needs to be reported to the school.</p>