<p>I'm a Boston University sophomore... I want to open a savings account so I can get part of my paycheck deducted from my checking account for something special in the future. I already have a checking account with Bank of America and figure I shouldn't have too much trouble opening one. When I mentioned this idea to my father, he said opening a savings account will make it look like I have more assets and thus will negatively impact my financial aid. Is this true? Would I really risk losing a grant or something because there's a savings account in my name? I mean, I could just stuff the money somewhere in my dorm room or have it opened under my girlfriend's name (she doesn't get financial aid)...</p>
<p>It shouldn't make a difference whether the money is in your checking account or in a separate savings account, it's still an "asset" and as a student-owned asset it will be assessed pretty heavily in calculating financial aid. People complain about this all the time: you're penalized for saving. They look at how much you earn ("income") and how much you have saved or invested ("assets") for purposes of determining how much you can contribute to your own education. (Same for your parents). But if you're saving a fraction of your income, in a sense it's counted twice---first as income, then as an asset. For your parents it's not as much of a hit since they're expected to spend down a smaller fraction of their assets; they get hit mostly on the income side. But most schools will treat any assets held in the student's name as fair game.</p>
<p>But I wouldn't recommend trying to hide your assets by stuffing cash in a mattress or opening the account in your girlfriend's name. If its yours, you're still required to report it, and if you don't, it's fraud.</p>
<p>Wait, so I'm screwed if I have two accounts (a savings and checking)? My dad said that while BU doesn't get to know how much money I have in each, they do know how many accounts I have... So I don't really have any incentive to save a portion of my money in an account with a higher yield if it just counts as an extra asset, right? If I open an account, BU will just see that I have both a checking and a savings account and will lower my aid?</p>
<p>And is it really fraud if I report the money but then decide to give to someone else? I mean, it's not like I'm not being taxed on it or this is unreported income... </p>
<p>It does not matter whether you have 1 account or 1000. It is the amount of money in the accounts that matters. If you have 1 account containing $1,000 your reportable asset is $1000. If you have 1000 accounts each containing $1 your reportable asset is still $1,000.</p>
<p>For goodness sakes, just give the money to your parents to repay them for what they have put out for you. They can, in turn, open an account for themselves and save money as a graduation gift for you. Not a problem at all. But yes, money in your name at the end of the year will be assessed towards your EFC and assessed at a much higher rate than your parents' assets, so it is smart to keep your accounts down low. Yes, it is a stupid rule that just makes us do a little more of dance, but that is the rule, and if you don't dance, you pay more. It does not matter whether the money is sitting in your name in a savings or checking account, it is assessed either way. And at current interest rates, it isn't going to make much difference in terms of interest either.</p>
<p>I have to say, I'm still a little confused. Let's say I earn $4000 during the school year. If, at the end of the school year, I have $1000 in a savings account (in my name) and the rest is spent or given to my parents, my EFC goes up, right? And, if I didn't have that $1000 dollars or gave to the parents or had it an account which I didn't own, my EFC would stay the same, right? Last year, I spent most of the money on my checking account. Thus, my EFC this year didn't really decrease significantly...</p>
<p>Yep, you got it. You are going to get hit on your earnings over $3500 (I think that is the threshhold). Nothing you can do about that. But you are also assessed another 20% (down from 30%) on whatever you have sitting in any account or under your bed.</p>
<p>income protection for students will be 3750 for 2008 calendar year and 4500 for 2009 calendar year.
Plus an allowance for taxes.
There is no asset protection for dependent students so any money sitting in the bank in students name will be assessed at 20%</p>
<p><<income protection allowance of undergrad student's income in the following ways: 1) for dependent students, it would increase the amount of the income protection allowance to $3,750 for the 2009-2010 academic year; $4,500 for the 2010-2011 academic year; $5,250 for the 2011-2012 academic year; and $6,000 for the 2012-2013 academic year</p>
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<p>I'm screwed if I have two accounts (a savings and checking)? My dad said that while BU doesn't get to know how much money I have in each, they do know how many accounts I have>></p>
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<p>I think your dad has it backwards. BU (or any other college) doesn't care how many accounts you have. They only care about the total amount of money in the account(s). It doesn't matter if you have 100 accounts with $10 each or 1 account with $1000. Same amount of money and that is what matters.</p>
<p>BTW...DS is a BU graduate and he had a checking and savings with B of A, a checking and savings here at our local bank at home and an ING savings account. The sum total didn't amount to $2500. BU didn't give a hoot that he had five different accounts.</p>
<p>And it's the amount in those accounts on the day you file your FAFSA that counts. So if you have a big bill...pay it the day before you file your fafsa.</p>
<p>Every one above is right, open whatever account you want, all assets- cash or bank account will be included in FAFSA. Pay any large bills before you file, but if you want to work on saving, do it.</p>
<p>My DD opened a mutual fund as a freshman and declares the value every year on FAFSA; it's not much, but it is hers and she is trying to save some money for a travel experience after graduation. Yes, I could put it in with my funds in my name, but it is her money and, face it, unless it is a ton of money it will not make that much difference. Even if it reduced her EFC the only increase would be loans anyway, so why mess with it.</p>
<p>If you are saving a thousand or so and you are not worried about Pell grant eligibility being tipped over the amount allowed, then it should not be that big a deal.</p>