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<p>Nonsense - a 529 plan doesn’t “tell” the college anything! A 529 plan is treated like any other parent asset and is assessed at the parental rate of 5.6%, as already noted above.</p>
<p>Be cautious of brand new members (just joined yesterday!) spreading bad advice and pushing their own agenda.</p>
<p>Does it work for the relative to simply directly pay some of the bills? No assets transfer to the student that way.</p>
<p>If the relatives pay the bills directly, it is still reportable as money spent to support the student. It would avoid the issue of gift taxes, but that is not the main issue here (and not really big problem if there are two parents and two other relatives involved).</p>
<p>The annual exclusion for 2013 and later is $14,000 - that is the amount the EACH aunt or uncle can give free of gift-tax to each parent (plus the student if necessary). Thus Aunt and Uncle can each give $14,000 to each of father and mother, for a total of $54,000 per year - should be enough to cover what the OP is talking about.</p>
<p>I agree the best option may be loans until after filing the final FAFSA and CSS Profile. I would avoid loans given by the relatives, because it muddies the water. You don’t want to loans forgiven in the end, you want them paid off via a gift. You also don’t want to raise any red flags in terms of fraud - if the loans are not forgiven, the school cannot come back and argue that there was never any intention of paying them.</p>
<p>A 529 fund in a relative’s name would not be the best option, in most cases, because the distributions paid to the school would still be considered untaxed income to the student. </p>
<p>The other option is to choose a school with an affordability guarantee, where you are allowed to have your tuition paid by a third party without impacting your aid package, but I’m assuming it’s a bit late for that option…</p>
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<p>Reportable on CSS Profile but not FAFSA, right?</p>
<p>Just a word of caution about presuming that either (1) the relatives will forgive a personal loan after you graduate or (2) the relatives will pay back your gov’t student loans after you graduate. Despite their best intentions, things could change between now and then, quite possibly because of circumstances beyond their control. And if they were, heaven forbid, to die before excusing your personal loan, it could fall into the hands of an heir who might not be so forgiving.</p>
<p>We just filed our FAFSA and there was no place where they asked for income that was not on the 1040. If this money comes in as a gift each year, where exactly on the FAFSA would it go? Ours didn’t go on there ANYWHERE.</p>
<p>^ check for these lines:</p>
<p>44i. Student’s Other Untaxed Income or Benefits
44j. Money Received or Paid on Student’s Behalf</p>
<p>Dodgersmom,</p>
<p>I am a new board member and my agenda is to offer a different and alternative view point. There is a lot of mis-information out there. I am not here to sell anything or to promote anything other than an exchange of ideas.</p>
<p>A 529 takes the guesswork away from the colleges. Instead of having to guess which assets are for colleges and which assets are for other purposes, the 529 makes it clear to the college as to where your money is going.</p>
<p>As another moderator stated, EFC is just the beginning of the equation. Look at aid offers from the colleges to families without 529 plans and compare them to families that do have them and guess which families get more loans added to their offers.</p>
<p>It’s not a coincidence.</p>
<p>I invite a healthy skepticism when it comes to college planning and the advice offered on this board. I do submit that any skepticism you have be directed to the college. They are the ones that are going to take the largest share of your money.</p>
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<p>Well, that would be a very persuasive argument . . . if such data was available. If you have it, post it (with verifiable sources). Otherwise, your argument is nothing more than a scare tactic.</p>
<p>The distribution of aid at different colleges is going to vary widely. You have to look at what other factors might have played into the packages offered to those with 529 plans vs. those without. Are the demographics otherwise equal? Doe those families without 529 plans have the same money saved elsewhere (in accounts that will be hit with the same 5% as parental assets)? Are there other factors that come into play?</p>
<p>How do you have access to the financial information from these comparable families? Families with 529 accounts are more likely to be well off, and more financially savvy. I doubt the 529 account is the only difference in the equation.</p>
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Ok, since the money was given to us rather than to S, it wouldn’t go on his part. What about the parent’s form?</p>
<p>The problem with 529 plans is that many families use them…not just “financially savvy” or well-off families. My line of work gives me access to this financial information. You are right…the 529 is not the only factor in the equation…but if all things were equal, families without 529 plans get more aid than families that do not.</p>
<p>There are strategies out there that help families manage assets that are not disclosed on the FAFSA…BY LAW. </p>
<p>You are right about aid distribution varying widely. You can’t just apply to a college and hope the aid works out. You have to understand how colleges meet need in amount and in type before you apply.</p>
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<p>You’ve repeatedly claimed access to “inside” information - what is your line of work?</p>
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<p>And is there some law that prevents you from disclosing them here? If not, and you are familiar with such strategies, and have actually joined this forum in order to help, then please share them with us. If, on the other hand, that wasn’t your motive in joining the forum . . .</p>
<p>sylvan8798 gifts to parents are not reported as income, but if they’re in parents’ accounts at the time FAFSA is filed then they’re reported as assets.</p>
<p>Since the OP now has the information he or she was seeking, this thread can be closed.</p>