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Regarding 529 plans: My understanding is that these plans can be helpful at FAFSA-only schools but not so much (if at all) at Profile schools. Someone please correct me if I am wrong about this.
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<p>I'm not sure what you mean by this. The assets in the 529 are treated the same way by FAFSA and Profile if the 529 is owned by the parent. If the 529 is owned by the child, then due to a loophole FAFSA does not count it at all for school year 2008-2009. However, that loophole has been closed for 2009-2010.</p>
<p>The funds in the 529 are still tax-free regardless of whether it's a FAFSA or Profile school.</p>
<p>If you read the PROFILE questions, they want to know EVERY possible source of funds. They take everything into consideration. They SAY that pension and 529 funds are not counted, but believe me, if the amounts in there are considerable, they are taken into account. If you take the PROFILE questions literally, they want to know every gift, every relative, every potential source of any money. </p>
<p>Back to reality, most people follow FAFSA rules in reporting financial info. If there is a grandma in the background willing to pay for college, you are really not being honest if you don't put that willingness down on PROFILE. Babysitting money, monetary gifts, all gifts are potentially supposed to be listed. But there is a huge gray area here. An offer is not good until it is made good. Many a relative has offered help, until the time comes to part with the money. It is not good sense to report this intent as it can cause you more grief it does not come to pass. The schools do not reward your good will and honesty, believe me. If the funds are gone, they are gone. So you have to use a lot of common sense in filling out FAFSA in terms of gifts and relatives paying things.</p>
<p>"If there is a grandma in the background willing to pay for college, you are really not being honest if you don't put that willingness down on PROFILE." "I hate to say it, but if you are seriously hiding money that the schools should hear about, you are being a bit dishonest. You are fortunate to have the help, and if this reduces your child's help, it's because you really don't need as much help."</p>
<p>I understand these comments and sort of feel the same way myself. The problem is that my brother is not wealthy (comfortable but not wealthy) and his motivation is to reduce the amount that I have to pay (most likely borrow) to send S to college. So if I have to report the money he is willing to contribute, and if reporting the money means that the college simply increases my EFC, then he is no longer willing to contribute and in a real sense the money is not available.</p>
<p>Already, is your son already in college? You might want to call the financial aid people at your college and ask, framing the question this way: tell them that you are having a tough time coming up with the EFC & your brother has offered to help out, but you want to know if that will have any impact on financial aid. They may tell you that they would consider that to be part of the "family" contribution, not reportable income. </p>
<p>Also... a loan is not income.... so perhaps your brother would be willing to lend the money to your son rather than give it out right.</p>
<p>What if your brother loaned you or your son the money, a real loan, with accumulating interest and everything, written up in a note. Then when the time comes, your brother could "gift" back a portion each year to wipe out the repayment needs.....of course, assuming your brother still wants to then and assuming your son graduates, etc.....I hate to throw that in there, but some times people do change their minds or, even more likely, their life circumstances change</p>
<p>I looked into this extensively earlier this year since we'd received some gifts from friends and family to help us through a financial difficulty. What I found out is that gifts to parents are directly excluded from the FAFSA and all the PROFILE schools we contacted were not interested in the information either. </p>
<p>The thought is this: gifts are not under your control at all. The money is still your relatives until they give you a check. Therefore, the colleges do not depend on those for financial aid decisions. </p>
<p>I don't think you need to state your brother's intention on the FAFSA or PROFILE and I don't think it is dishonest. Your brother's business could fail, he could have medical problems and need the money, you can not depend on it happening. </p>
<p>This has been discussed in several threads on CC. Search on gifts to parents; grandparents; and gifts to students.</p>
<p>Hope that helps</p>