<p>So D got accepted ED by dream school, now reality: fin aid package stinks.
Here's the query, rather queries:
1) Is the package less than, well, optimal because we put a lot of money away over the years for her education (but of course not enough to pay for the whole thing)?
2) And if so, should we use all the money to apy for year 1, leaving nothing for years 3 - 4? Does that improve the fin aid from the school?</p>
<p>We had a similar "shock" and it was simply because of our total assets (home, investments, savings, retirement). Every school is different in how they look at your ability to pay for college.</p>
<p>Common wisdom would indicate that if you unload a lot of money at the first, then you might get some at the end...Right? Maybe. On the other hand, perhaps you'd make more in investment income over the same period.</p>
<p>Now if the school gave you a real nice low interest loan, and you could make more money investing the money instead of paying for the education right away, then that would be leveraging your money (of course with the idea to pay off the loans with the investments+income later).</p>
<p>Lot's to think about</p>
<p>OP, if the money is in your D's name - absolutely. That hurt you. In your name? Not so much. As to Q 2, f you have less assets while having the same income you should by formula have greater need found in subsequent years. </p>
<p>Someone better at need aid than I am can give you the exact numbers but kid's cash : @ 35% per year. Parents cash above X (whatver the school allows) maybe 5-6%. Huge difference.</p>
<p>Curm is correct. Having the assets in D's name is tapped at a much higher rate.</p>
<p>One additional thought. Did you recently cash in any savings bonds. We received several packages last year and two were substantially different. What we discovered is that the interest that was reported from cashing in savings bonds was thought to be interest on D's saving account, so they believed she had MUCH more in savings. A call to the FA dept and additional documentation changed the packages to be more in line with other offers.</p>
<p>Princeton only duns student assets at parent's rate. For most schools, I believe the kid's cash withdrawal per year has been lowered to 25%.</p>