<p>If the recent poster owns a home with a mortgage, they could transfer a portion of that $300k non-retirement assets to pay off the outstanding mortgage, then none of that would count on FAFSA.</p>
<p>They can use the EFC formula and probably learn they have $30-$50k protected in assets.</p>
<p>If they own a small business and need to buy any large equipment or otherwise invest in the business, this would be a good time to do that, using some of those assets.</p>
<p>The problem with hiding money is that if it is well "hidden" from FAFSA it is also unavailable to you. If your local 4 year flagship has a COA of $25k, and you have $0 EFC, you might have a Pell around $4500, an ACG which will increase each year $650-$1300-$2000 annually, a state grant $5000+, and some SEOG and university grant- maybe $10-15k in grants, that leaves you $10k or more, even with a $0EFC. If you just hid all your money, how are you going to pay that? Unless you can take loans and KNOW that you can gain access to pay off the loans after graduation.</p>
<p>Also, if any one making much more than $50k in income hides assets at a FAFSA school (usually publics and lower endowment privates) then they are likely not eligible for much need based aid</p>
<p>At a Profile school none of that helps anyway!</p>
<p>Who needs to hide money these days? My house value is declining, my 401K is down significantly and I'm not sure where our kids 529's are at but I'm guessing those are dismal as well. So much for saving and being smart with investments. Wish I had bought gold too. Maybe the kids' savings bonds will be worth something. ;)</p>
<p>With the sad state of my famly's investments these days it makes more sense than ever to try to maximize our chances of getting aid. We lived frugally all those years so that we could afford college for our kids, but now it is questionable to say the least.</p>
<p>Unfortunately, we used both UGMA and 529 accounts as our primary "college" savings vehicles, bearing in mind of course that the UGMA money is NOT college money per se, but rather investments in my children's names with me as the custodian. The 529s I believe get reported on our family taxes, so are not considered assets belonging to the kids. Right now our EFC is higher than the cost of attendance at my son's favored (state) school. </p>
<p>A large portion of the EFC number seems to be coming from my son's small income and fairly large investments (around $30k give or take). This is virtually all UGMA money. Our tentative plan to address this is to purchase a large life insurance policy with the entire 30k, or possibly an annuity. We think that this will drive our EFC down to the point that we might be able to get a partial grant, and deferred loans for the rest. We will then use approximately 1/4 of the 529 money each year, and get Stafford/Plus loans (??) for as much of the balance as possible, and supplement from cash if necessary (and go after scholarships of course, but that can't be depended upon at this point). At the end of college we should have around $30K in life insurance redemption value available to use to pay off any loans. </p>
<p>Granted, I have provided few real numbers here, but does this approach sound viable? The main question, which has already pretty much been answered on this forum is: If I cash in the UGMA money and buy life insurance with it, does that exclude it from consideration by FAFSA even though I will be doing it just one month before I fill out the FAFSA? (Note that the UGMA accounts are currently under water and will generate a small tax loss for 2008 if they are sold). There isn't any kind of "look back" on this type of thing, is there? I'm thinking it is perfectly legal.</p>
<p>The next question we will need to deal with is, should we take some of the family investment money (that is not in retirement accounts) and put it into insurance for a few years too?</p>
<p>damn it,
they should have an option where you could just send them tax returns, w2's, that whole jazz and they do all those calculations themselves for a fee.</p>
<p>Separated parents+1 business+1st generation born in america= hell when it comes to this stuff.</p>
<p>Fafsa and prefinancial aid questions (from colleges) were fairly simple, but the business/farm supplement just baffles me.
They should seriously have a step by step guide on it.</p>
<p>I just did the business supplement for our small businesses. Most of the numbers come from the Schedule C. Most of page 2 may not apply, and you can just fill out the right hand column with current estimated value of business assets (if you qualify per the instructions). Looks intimidating at first, but there will be a lot of empty sections, and a lot of "0's".</p>
<p>I would never advocate that anyone “hide” their money for the purpose of manipulating financial aid statements. That said, I am certain many people do it. I know of a family that just received $25,000 worth of <em>financial aid</em> for their daughter to attend a fairly reputable college. This family lives in a $2million house in an extremely affluent town. Though they only own one house now, they used to own a second house and used to own a large yacht. They travel the world and their kids have never known what it’s like to do without.</p>
<p>What happened to the days when financial aid was reserved for poor kids who grew up in deteriorating inner city neighborhoods? </p>
<p>There is no honor in hiding your money to dupe a financial aid office of any college. It’s shameful in my opinion.</p>
<p>Hiding money, doing things illegally is shameful. But many of the legal - and smart - options mentioned by posters on this board seem to elude many middle class families. I have known several families this year that failed to act in their own best interest when there were legal options they could have taken to save substantial amounts in college costs. College consultants that work from a financial perspective may be a good investment for many families who either don’t have the time or the confidence level to make the best decisions while they still have time to exercise their options. I’m sure there are better and worse options when choosing consultants as well - I know the consultants working in my area offer hour long private follow ups with families who have attended their seminars. I think it’s a good idea to attend several of these free presentations, go to follow ups and make a wise decision regarding your own personal situation as to whether or not the legal options available require you hiring a professional to navigate the process. I would never hire anyone who began their presentation promising the impossible and talking about hiding assets. Many people hire accountants to file their taxes - if your situation warrants it, why not hire a professional to make certain you are evaluated in the optimal legal financial aid context?</p>
<p>Another example of a recurring post. 2005 > 2007 > 2008 > 2009 > 2010. The OP is long gone but it will probably always be a sore point for posters.</p>
<p>The best thing to do is to look at some PROFILE and FAFSA forms and fill them out now. See what funds you have to report where and what counts. If shifting some of your assets helps you, such as using assets sitting in an account to pay off your house in order to be eligible under FAFSA which does not look at home equity, go on ahead and do so. Read some advice books on the subject. Not a problem, moving money somewhere it does not count. Your parents can go ahead and make that large pension contribution. You may want to pay your expenses and have your parents have a college fund in their names so that assets you have are under them rather than you.</p>
<p>The line is drawn when you are outright deceptive. Like hiding money under the mattress, or not reporting assets that you don’t think they’ll find.</p>
<p>A person whom I know who had gone to one of these consultants was told to take a home equity loan and put the money into tax deferred annuities. He was apparently advised this would reduce the assets on the CSS profile and at the same time provide them an investment vehicle for retirement. He was trying to tell them that they could deduct the interest on the home equity loan and pay it off in a few years, while the loan amount grew tax deferred etc.</p>
<p>This sort of links into what a previous poster said, they are trying to see you retirement planning. I am not sure if that person who gave me this advice did follow through (he was giving me this advice saying I could consider it as I was talking about high college costs), but I decided I was not going to play these games.</p>
<p>Interesting that this thread has been resurrected multiple times over these past 5 years. Even jamiemom posted here, and she hasn’t been on the board in some time (miss her posts). Agree that there is a BIG difference between appropriate financial planning and being purposefully deceptive as mentioned in posts #91 and 92. Those who are being purposefully deceptive to con the schools into giving undeserved need-based aid turn my stomach. This is different than those who have true, <em>true</em> need. </p>
<p>For those of you trying to hide your assets, I’ll be happy to hold the title to your paid-for house. Feel free to quit-claim it over to me. My preference is a second, vacation home. Beachfront and mountain property, especially near a good ski resort would be a plus.</p>
<p>@skipshot,
financial aid is not just for the poor, it is also a reward for the very smart. Its a crapshoot. Some fare better than others, and some know how to maximize their ability to get FA, and many do it legally and not hide anything. They just have good planning and strategy.</p>
<p>My sense of skipshots post was referring not to what is legal, but what is ethical. Its like the people who move money around so they can inherit grandma’s money, and grandma will live in a nursing home paid for by medicaid. Smarmy, IMO.</p>
<p>The “consultant” I talked to wanted me to take out the biggest possible HE loan I could and put it in a single-premium universal life policy, which he would be happy to sell me (IOW he was also an insurance salesman). It was an interesting idea - the principal would have been accessible, the insurance component was cheap, some of the investment vehicles were pretty safe with decent returns, and it could have knocked up to $15K off my expected contribution at a CSS Profile school that counted all of my home equity.</p>
<p>Most CSS Profile schools, AFAIK, are not yet counting the cash value of life insurance as an asset.</p>
<p>But there were costs to set it up (commissions, the “consultant”'s fees, etc), and it would have strapped up with an enormous mortgage payment, and it’s not 100% clear how much it would have helped because many Profile schools protect some level of home equity, and in my case my situation is complicated and my Profile EFC is probably enough higher than my FAFSA EFC that it may not have benefited me.</p>
<p>He was also offering to fill out the forms for me, and help white-wash my kid’s application. All for the low low price of $1500. We declined.</p>
<p>He had no ideas for lowering income though, which is where the huge majority of EFC comes from (unless you really are wealthy). Unless you are wealthy enough to quit your job/get your income under $50K, and arrange things so you can file 1040EZ or 1040A, I don’t think there is much you can do.</p>