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<blockquote> <p>I've been working since I was 14 and putting half of everything I make into my bank account.>></p> </blockquote>
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<p>And that is something you SHOULD be proud of. It's not easy balancing a job, school and social activities. I think it's terrific you have done this. That you will now be using it towards college expenses (very minimally so, I might add) should be considered an investment in YOUR future.</p>
<p>I am looking at this question in a different light. It is true that students are expected to contribute to their education even if the family situation is quite dire and the EFC is zero. It is also true that if you have money saved for college, it should be used for that purpose. But there is a situation with financial aid that is very troubling and many of the top colleges acknowledge this situation, but most schools do not. That is the policy that any funds in the student's name are expected to be tapped at 35% of the amount on the closing date asked by FAFSA. The big problem with this requirement is that those with foresight and some financial savvy make sure that there is very little money in the student's account on that date, as family assets are only hit up about 5%. So you get the situation of two families with identical financial statements except Family A has had the student save all of his money in a designated account for this student since day one. He now has $20K saved up for college. He now has to pay $7000 out of that account for his freshman year regardless of any other family situation. It a locked in formula, unless the college has specifically decided that this is an unfair situation and counts it as family assets as a few of the top colleges have done, but this is very rare as of now. Family B has blended the savings in a designated family account or spent down the amount for the student's expenses so that Student B has zero in savings. That same $20k is assessed about $1000 in that case or not at all. And every financial planning book, college finances book addresses this issue, advising families to avoid what Family A has done.</p>
<p>It is a troubling situation since I do believe that when you have the money to pay for college, you should pay for it. I grew up with an accumulation of savings bonds and a bank account, painstakingly accrued over my lifetime with my parents' help for the sole purpose of paying for my college. And I never gave it a thought that the money should go any other place. However, I don't believe the college planning network was as extensive in my day, and as I was given generous financial aid and scholarship fund, I don't think my savings had that much impact on what was given in financial aid. That was 30 years ago. Today, it is a different story. I think any financial counselor would be remiss in not having the student either spend down his account or "giving" it to the family so that it is not assessed the whopping 35%. I say this because it is rare in the scope of things that a student gets 100% of need--only a few schools can afford to give that, and the cushion that the student fund could LEGALLY give if it is thus diverted ahead of time can make a difference in affording a school. Even schools that give 100% of need often give loan and work options that can make it tough for a student.</p>
<p>I am NOT advocating stuffing the money under a mattress and hiding it or doing anything illegal. There are a number of LEGAL ways to divert those funds and not have them get hit the 35% by FAFSA.</p>
<p>I'm not sure on that 35% number but I think the original poster is missing the point that either way you have to pay. </p>
<p>If they had saved a bunch of money and bought a car, they would still be expected to pay a similar amount as they would had they not bought a car. The benefit to not buying a car is that maybe you dont have to work, or all the money from working can go straight to your pocket or your savings and not to the school. I know that your goal isn't to shortchange the school simply to be able to use your money for you, but the school is going to get some of your money whether you have to work, pay back loans, or pay up front.</p>
<p>I guess where I am confused is that the OP wants to "Use the money for him/herself"
If the moeny is USED for YOUR education, aren't YOU the biggest beneficiary?</p>
<p>As Otto states:</p>
<p>school is going to get some of your money whether you have to work, pay back loans, or pay up front. So almost like the IRS- youcan pay me now, or pay me later</p>
<p>The school that I got into expects me to pay them ALL of my savings and assets over the next four years, 25% each year. And if I don't have the money after the first year, I still have to pay them the same amount as before each year. As far as I understood, this is separate form the amount I have to earn over the summer and with a term-time job. I don't mind paying 35% of whatever I saved, because I do believe that my education is worth it, but I don't want to give away all of it.</p>
<p>You will have to file new FAFSA and other financial aid forms (if required ) each year. </p>
<p>Yes, it is true that no matter how much money you have or don't have in savings that each year there is going to be a student contribution . This amount will be separate from the work-study, loan portion of your financial aid. </p>
<p>Your student contribution is going to be somewhere between $2000- 3000 each year. If you have savings you will pay for it from your savings. Your student contribution will come from your savings or from summer earnings</p>
<p>If you don't have savings, then you will have to work over the summer (maybe even 2 jobs) to earn the money.</p>
<p>If you don't have your student contribution, the school is not going to give you extra scholarship/grant aid to make it up (I do not who where you will be attending, but I remember Wesleyan being very specific about not increasing aid because a student does not have their contribution) so you may have to go out and get an additional loan.
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<p>Your financial aid will be broken down as Follows (we will use hypotheitical numbers):</p>
<p>Cost of Attendance (Tuition, room , board, books, misc) $40,000</p>
<p>MINUS: </p>
<p>EFC- Your Parents Contribution (based on information from FAFSA/ CSS Profile or other institutional financial aid information) $10,000</p>
<p>Student Contribution (money from your savings and /Or summer earnings) $2000</p>
<p>(total $12,000)</p>
<p>= Demonstrated Need (28,000)</p>
<p>Your demonstrated need will be met as follows (assuming your school meets 100% of your demonstrated need and does not gap):</p>
<p>Studnet Loan $2650
Work Study $1550
Scholarship/ Grant $15,000
Parents Loan $ 8,800</p>
<p>Total Aid Package : $28,000
(If you are not locked into a school you should really look at the average scholarship/grant aid given by your school and the average amount of indebtness). </p>
<p>Also remember that you can use outside scholarships to reduce the work study/ student loan portion of your aid package. I hope that this helps to give you a clearer picture</p>
<p>I suggest going to the library, or a bookstore and looking at some books regarding financial planning for college. "Taming the Tuition Tiger" is a very readable one with a small but directed section on the student's contribution. The rules for students are ornerous, unfortunately. A student is assessed a hefy percentage of his earnings in addition to the 35% by federal methodology on whatever he saves. Schools will use their own formulas at times on the student's money, but it is hit up at amounts exceeding family income and savings which makes perfect sense, but as I mentioned earlier, what is happening is that people are planning around it--legally. This same phenomonon is occurring for medicare or total care numbers where families "spend down" accounts to avoid bankrupting one family member because of the needs of another. Yes, there are abuses occurring as well. But the fact of the matter is that with planning and resourcefullness there are legal ways to plan to get the most out of financial aid.</p>