How much are assets taken into consideration?

Paying for College
1

I’m considering going to school in the spring, but it absolutely can not happen without FA. My husband and I have worked to save up about a years worth of his salary (which is in the second lowest tax bracket) because he works in a field where the risk of being killed or seriously injured is high, and I’ve been a stay at home mom for a while.

I’m worried our safety net will prevent me from getting any aid, but I really really don’t want to borrow from it to pay for school (both because it would take some time to pay it back and there have been close calls lately and I’m not willing to not have a way to take care of my child if something should happen).

So, how much are assets taken into consideration? Will they deny me for having any? Or is income (as I said…low bracket, one income family) going to help me out?

2

This is the best article I’ve read on providing a quick overview of financial aid forms and paying for college. You can also just go through the forms and read through the directions to understand specifics and the IRS has a booklet available online about educational expenses and calculating credits, too.

https://www.google.com/amp/s/www.forbes.com/sites/troyonink/2017/01/08/2017-guide-to-college-financial-aid-the-fafsa-and-css-profile/amp/

3

It can depend on where you apply and what type of aid. For example, most if not all Ivy league universities that offer need-based “scholarships” (really financial aid from their own pocket) do consider both income AND assets. However, a typical application for financial aid at a public university (with aid offered through government programs) will usually only ask about income.

4

I don’t believe that is true. FAFSA takes into account assets which would include investments and cash.

For FAFSA I’ve read parental assets are assessed at about 5.6% while student assets are 20% (each year). Income IS the primary driver. If you are low income you might be able to use the simplified needs test in which assets aren’t included.

Have you tried using a Net Price Calculator on the school’s web site?

5

Table B4 from the EFC calculation brochure has the married student’s asset protection allowance based on age, so only the assets above that amount would be assessed at 20%. I also see a different table for student’s with dependents other than a spouse, too. Probably easiest to work through the work sheets with your information to figure out how different numbers calculate your EFC. Retirement assets (Pension balances, 401K, Roth, IRA) are not counted, though the tax year’s contributions to them are included in income.

https://studentaid.ed.gov/sa/sites/default/files/2017-18-efc-formula.pdf

6

^ Thanks for the investigative work. Being a married student changes the equation.

7

@mommyrocks

Where did you hear this? It is not accurate in the vast majority of cases. The FAFSA requires both income AND assets to be reported.

The exception would be if the family qualifies for an auto $0 EFC or the simplified needs test.

If the family income is over $50,000 a year…neither auto $0 or simplified needs would be applicable…and assets DO count.

8

@thumper1 Well, I may have been confused because of WHO has to provide this information when it comes to divorced parents, which was my situation. Public universities using FAFSA are only concerned with the primary custodian’s income and assets, while the Ivies wanted everything from the ex also. I didn’t have assets to speak of when I filled out FAFSA so it was simple for me, but ex has tons of assets, and when I looked at all the forms he would have to fill out and info he would have to provide for the Ivy to get their aid/scholarships, it was clear he would never do that. Daughter got into an Ivy but without aid for that reason (and ex wouldn’t pay the tuition), so she wound up taking a package of merit scholarships at a public university (she does not use need-based aid after all). Anyway, thank you for clarifying about FAFSA.

9

Yes…this includes both income and ASSETS…for whomever is required to be included on the FAFSA.

Assets are only excluded if the student has -auto $0 EFC or qualifies for simplified needs test.

Also, there are several public universities that use the CSS Profile as well…UVA, University of Michigan, UNC-CH, and I believe Georgia Tech.