Need based grants after freshman year

Our son is likely to attend a private college where he may get a grant on top of his merit scholarship. We know that his grandparents will make up the difference between that and the COA. Is the grant likely to go away after freshman year? We wouldn’t have a problem with that, since they can certainly afford to pay and will do so willingly. I just think it would be good for them to be aware if they are likely to pay more the last three years. One school just requires FAFSA and the other 2 require CSS, if that makes a difference.

Need-based grants are based on need as calculated by the school after considering the financial circumstances of the student and the student’s parents (not grandparents). At schools that meet 100% of need, as long as the need is there as calculated by the school, the aid will continue while the student is enrolled (not just the freshman year).

Won’t he have to report the source if his gap is paid by an outside source after the first year? We didn’t have this situation, but I thought from past posts from others that this would indeed catch up with the student after freshman year.

I believe the grandparent contribution would be reported on the FAFSA under untaxed income (money paid on behalf of student), but would count for the year it was made. So if grandparents paid something for college in 2018, it would be reported on the 2020/21 FAFSA under prior prior year rules. So junior year.

How does your income compare from 2016 to 2017?

You could try their net price calculator with different scenarios and see the impact on aid offered.

For example we looked at how the grant aid changed from having two in college to just one.

Or having 5 in the household and then 4, when the older one is independent.

@mommdc, our income isn’t going to vary significantly. My inlaws have agreed to pay the difference between the cost of attendance and what we can pay. They could pay it for all four years, but we don’t want them to pay any more than necessary.

Once you’ll have to report that the grands are paying some/all of tuition, likely some grant money will disappear because aid will no longer be based on your income alone

Just to be clear, if the grandparents chip in, their income will not be a factor. A contribution from the grandparents will increase the student’s untaxed income, which will be considered in the need-based aid formula regardless of what the grandparents do.

Sorry I wasn’t clear.

Aid will not just be based on parents…the grands contribution to college will be a factor.

Yes, try the net price calculator with various scenarios, including the student getting additional untaxed income or gift (the amount the grandparents will contribute).

Of course, if there are also merit scholarships mixed in (and not included in the net price calculator), you also need to find out which part of financial aid is replaced first. Some colleges replace unmet need, student loan, and student work first when there are merit scholarships (more favorable), while others replace grants first (less favorable).

Thanks for the input everyone. One school has a guaranteed 25K per year for children of educators. That wouldn’t be going away no matter what (and that was the one I’ve believed was the best fit for him since before I knew about the scholarship). I think it would only be a big issue if he chose Ithaca or Fordham (which is a pretty big reach).

Would the grands be willing to gift the money to the parents…who can pay the college bill?