<p>In my case, my EFC is driven mainly by the assets that I saved for retirement and my daughter's education. I expect my assets to decrease each year my dd is in college by 85K per year due to tution, living costs and health insurance. My EFC will decrease by roughly 5K per year and be 15K lower for her senior year.</p>
<p>My question is if she gets merit aid only in her freshman year, does that aid stay constant or does it rise as the EFC falls? Her school will most likely be one that does not gaurantee to meet need.</p>
<p>My question is if she gets merit aid only in her freshman year, does that aid stay constant or does it rise as the EFC falls? Her school will most likely be one that does not gaurantee to meet need.</p>
<p>Not sure what you’re asking.</p>
<p>If your D gets merit aid for ONLY freshman year, then the aid goes away after freshman year.</p>
<p>If it’s for only freshman year, then why would you ask if it will rise as EFC falls?</p>
<p>If your D has one-year-only merit aid, and her school doesn’t meet need, then her aid will decrease.</p>
<p>merit aid doesn’t usually increase when EFC decreases. </p>
<p>Or maybe I’m not understanding what you’re asking.</p>
<p>I understand the question . . . but I don’t have an answer for you.</p>
<p>There are two types of aid: merit aid and need-based aid. Merit aid is, by definition, not based on need. So, whatever she’s awarded should remain constant for all four years - assuming she meets the requirements for the award to continue (satisfactory GPA, for example). (The only exception would be an award that is directly tied to the amount of tuition - for example a “full tuition” of “half tuition” award - in which case it might increase when tuition increases.)</p>
<p>If she were attending a meets full need school, then she’d qualify for need-based aid (in addition to the existing merit aid award) as your EFC decreases.</p>
<p>If she’s attending a school that does not meet full need, I have no idea if she’d be awarded any need-based aid (in addition to her merit award) as your EFC decreases.</p>
<p>Your situation doesn’t sound all that unusual, though . . . so someone else here may well have an answer for you. I’d also suggest checking with the school directly and asking if she’d be eligible for additional aid as your EFC decreases.</p>
<p>I think dodgersmom answered well. First, is the merit aid for one year only or is it renewable based on satisfactory academics? Usually schools that give merit aid give it in a renewable fashion - same amount for each year. Private scholarships, on the other hand, are often just for a single year.</p>
<p>If school’s merit aid is a certain amount, typically it will be the same for each year even if tuition and costs go up (as they most likely will) which means your net cost will likely rise each year.</p>
<p>Need based aid is dependent on your need (EFC or CSS Profile calculations) and will change each year depending on the calculations of your income/asset. In your case as you describe it - it would likely increase each year. Also it might increase to cover the increased tuition etc. each year. Most often too, merit aid will replace need based aid until the merit aid is at a level that would exceed any need based aid the school provides. They don’t just get added together to reduce your contribution.</p>
<p>Thank you for your detailed responses.</p>
<p>Right now, my dd is still applying to colleges. Since we will not qualify for need based aid, we are hoping for some merit aid. By her final yaer, most of the liquid assets will be gone unless my employment status improves.</p>
<p>I wish the colleges would be more upfront with the financial aid calculations. It is hard to determine what you can afford without knowing how they treat the house value and retirement accounts. I did asked one school. They said don’t worry about it, we won’t ask for much of the house.</p>
<p>This is the only product (4 year education) that I can think of where you commit to buy and only know the first year cost. You basically put all your money on the table and ask how much do they want. They say X for year 1 and we will tell you next year what we want that year.</p>
<p>Money that is IN your retirement accounts likely is not tapped at all. These would be TSA or IRA types of accounts. However, the amount that you contribute each year is added back in as income. </p>
<p>When you do the net price calculators for each college, you will see that they do not ask for IRA or TSA types of accounts. NOW if your retirement is in regular savings, that money WILL be included as an asset even IF you plan to use it for retirement purposes.</p>
<p>
Some merit aid is not pure merit but has a need-based element. Usually the description of the scholarship will indicate this, but not always.</p>
<p>OP didn’t mean “merit aid for only the freshman year”, they meant “only merit aid for the freshman year, and no need-based aid”…</p>
<p>notrichenough is correct. I should have been clearer.</p>
<p>Some posters have indicated in other threads that some schools have started looking at retirement accounts as an asset available for tution.</p>
<p>Schools seem to vary considerably when looking at the equity in the house as an asset. It does make sense on one level but unless you have income it is had to take out a mortgage to pay for school. I do realize that the house could be sold.</p>
<p>thumper1, how accurate are the NPC? Threads here seem to indicate that their accuracy varies considerably. Has that been your experience?</p>
<p>House equity and retirement assets in protected accounts such as IRAs, 401k’s, and pensions are not counted for FAFSA.</p>
<p>House equity may or may not be counted for CSS Profile schools. The amount may be capped or based on income or not capped or even not counted, only the school can tell you how they count it, and not all schools will tell you.</p>
<p>No one knows how any particular Profile school considers retirement assets. Speculation is that they are looking to see if you have accumulated “too much” in retirement assets, and if so they may count more of your income or other assets. Who knows.</p>
<p>If your retirement assets are not in protected accounts, you are SOL for FAFSA, and probably most Profiles schools. You may be able to get special consideration at a Profile school and remove some of the assets from the calculation.</p>