<p>*You have LESS financial need because you HAVE money in that UGMA to help pay for college costs. If your parents earn $100K a year, their EFC is going to be in the $25K range regardless of where that UGMA account is held.
*</p>
<p>I think the valid point is…</p>
<p>The $25k in EFC (without UGMA) is supposed to get paid for out of past earnings (savings), current earnings, and future earnings (loans). But, in this case, the savings can’t go towards that EFC, because it is creating a larger EFC. </p>
<p>I don’t think we can really argue that EFC is supposed to come from past savings, if past savings (in the child’s name) substantially increases the EFC to the point that it can no longer help with the EFC (if the savings didn’t exist).</p>
<p>The situation is a problem because the savings is in the kid’s name, instead of the parents. If it had been in the parents’ names, the effect would have been negligible.</p>
<p>Once parents are aware of this situation, there’s no reason to ever save in a child’s name.</p>
<p>I see the frustration.</p>