Yes…the financial aid process for grad school is very different. @kelsmom will surely chime in. But here is some info.
Grad school financial aid is largely merit based. It is based on the strength of your application and the college’s desire to have you as part of the cohort. Aid comes in the form of grants, scholarships, assistantships, fellowships, sometimes work study, and loans.
I don’t know about tax implications of 529 payments, so I am not comfortable responding to that question. If you post the question in the Financial Aid forum, you’ll get some advice from more knowledgeable folks. However, it’s possible that the school might allow you to hold off on payment of the amount of the scholarship until it arrives. Contact the financial aid office & ask to speak with a manager. I worked at several schools that would work with a student who could show proof that a scholarship was coming. It’s worth a try, because that would be the easiest way.
Graduate school financial aid is all over the map. The student completes the FAFSA as an independent student. Some programs might request parent information (medical and law programs often do so). In the past, the conventional wisdom was that grad school financial aid was hard to come by. That is changing, however. Even art schools have funded programs now. Not all schools offer great aid, and often the aid is tuition remission & stipend tied to work. There are very good websites for grad information, so search for those. Each school will have a dedicated graduate admissions staff, and they will be very helpful. Competition for students is huge these days, so financial aid can be good. BUT … not all programs offer aid. Social work typically does not, for example. MBA programs generally do not, although there does seem to be some opportunities there compared to the past.
Thank you!
Great, thank you for this helpful info!
re grad school: our D is there this year in a professional program (architecture). she was offered no extra aid from 3 OOS public schools. The private schools all offered her scholarships, grants, work study and assistantships. And loans. Just to let you know, the aid was nice, but the total price was still more than OOS public with no aid! (She is at her top choice private school though now, as there was a secret scholarship fund in the family that appeared. 
)
Thank you, this is really helpful to know!
We are working on the CSS Profile and looking for guidance on valuing employee stock and options at privately held companies. We are prohibited from selling these options / stock and there is no market for them at all so it seems that there is no current market value and we should list them at $0. Is that correct? Or do we need to use the latest 409A or other valuation of the shares to guesstimate the value, even if they can’t be sold?
Thanks for the help!
@rickle1 how do you value stock options? Seems to me they DO have a value.
You do need to report stock options as assets. The value is the stock price on the day that the FAFSA is filed. To be honest, I never had to deal with stock options on the job; I don’t know for a fact how they are valued. I do know that vested options are reported using the stock price (net of fees) on the day the FAFSA is filed. I see some articles that say unvested options are not reported, while others say they are. I would contact the financial aid office at the student’s school (or top choice school) to ask about your particular situation.
Options are complex because there are different types, especially when vesting is involved. Also, the question pertained to private company stock options which have no market (because they’re private). I would speak to a CPA who really knows this part of the tax code.
Just thinking out loud here. If you have no rights to cash in/cash out / keep value based on vesting schedule (meaning you can’t just walk away with the profits), I’m not sure what “present” value they have. Seems to me they could easily be worthless in the vesting time frame (if the stock doesn’t perform) . Also, if there is no market for the stock (private company), how is value determined with or without a vesting schedule. What happens if the company goes out of business prior to the exercise date and there’s no movement in the stock price?
An option is a right to buy. It doesn’t mean you have bought. Not sure you actually have any value until you exercise the option (or the right to buy). If I was given a option at $10 to buy Company X and the stock never got to $10, the option would expire without being exercised and I would receive nothing. How can I have to include that transaction that never happened into my asset base. Once you exercise it, sure.
But I don’t know how it really works re FAFSA.
If I were still working in financial aid, I would call the federal training officer for an answer to this question. It’s definitely complex! My gut says that this should probably not be reported as an asset, because it doesn’t seem that a value can be assigned to it. But I would punt it to the trainers for a response, to be on the safe side. That’s me, though … the financial aid office at your child’s school will do what they feel is appropriate.
My company offers a “Non Qualified Deferred Compensation” plan that basically delays receipt of a percentage of my income to a future date. The income that is deferred is not reported as income on my W-2 during the year of deferral, but is reported as income in the year of distribution. This is a fully compliant 409(A) plan, meaning that the money is not constructively received by me in the year of deferral due to a number of specific statutory restrictions/limitations/constraints that keep the money from really being mine in any way until the year of distribution. Even to the extent that if the company goes bankrupt there is no money set aside to repay me.
For the CSS, am I required to include this as “untaxed income” in the year of deferral?
My two primary reasons for thinking “NO”:
I have a daughter who will start college in 2024, so the decision I make now regarding a potential 2022 deferral will directly affect the basis for her freshman EFC (or SAI by then I guess…)
I know that in the end, each institution may have their own take on this. But, I’ll only fill out one CSS form that will get submitted across all of the schools my daughter applies to. So I need to figure out if I’m required to report it up front, or just be able to answer questions and provide documentation if they ask. Also, I’ve contacted a couple financial aid offices about this question and their answers ranged from “I don’t know” to “Maybe??”.
I’ve scoured the internet and come up empty on a definitive answer. What caught my eye in this thread was the mention of a “federal training officer”. Is that someone who might be able to address this in an official capacity?
Appreciate any advice, and thanks to all who have contributed to make this such an informative thread!
I don’t think it’s income…but could the value of this deferred comp be an asset? I don’t know.
I have never dealt with this, and I couldn’t find any information myself. However, I found this post on CC, from 2011: “ I contacted the organization at the College Board that administers the CSS Profile to ask them how to report contributions to a 409a non-qualified deferred compensation plans. They responded that it would not be considered untaxed income for the year it is contributed, but would be considered a future asset - “What you contribute is not included anywhere in the CSS/PROFILE application. However, the value of the 409a would be reported in section PD-175( for parent 1) or PD-270( for Parent 2).” - was their exact response.” I imagine this is still the case. (No clue what PD-175/PD-270 refers to, but I am sure you’ll see it when completing the Profile. It’s possible it’s a different number now, of course.)
Thanks for the quick responses! I had stumbled across that 2011 post as well, and since it was now 10 years later I figured it would be worth calling the College Board myself, which I did last night. The woman who answered the phone was nice, but ultimately unhelpful. She wasn’t at all familiar with what a 409(a) was, and I ended up trying to teach her what I already knew…
To close out this topic, I’m not going to plan on reporting my deferral (for my reasons laid out above). Will be interesting to see how it gets handled, and I’ll try to remember to hop back into this thread once I find out. But that will be 2 years from now, so no promises!
On a separate note, is there any news on whether the CSS profile will change in 2024 to match the FAFSA’s elimination of the “multiple dependent in college discount”? I’m sure it’ll take a while to get an official answer, but maybe there are rumblings/rumors of which way the college board is leaning? Or is that another situation where each institution will handle it differently?
I am betting that the default formula will match FAFSA, with individual schools being able to alter the formula if they see fit. I am no longer working in financial aid, but I do follow NASFAA conversations … at this point, schools haven’t shared their plans.
Warning this will be kinda of long but I been having a hard time at my college lately and a big event impacted my mental. I barely left my room and in consequence I’ve lost my financial aid. I appealed stating my case, but I feel like my reason wouldn’t be good enough and I don’t kno what else to do…my mom’s super strict about academics and I don’t have history to stand alone with my credit…any financial advice?
It sounds like you may have mental health issues. You should talk with the appropriate person at your school about your situation. You can try the counseling center, or the Ombudsman, if your school has one. Please reach out to your school for assistance - they will be much more helpful than I can be. I wish you the best as you navigate this situation.
Rookie parent here…
Based on our incomes, it’s clear we won’t require for any financial aid though did fill out FAFSA as one of the school’s my son applied to apparently required it for merit consideration. I’ve seen on marketing materials from Notre Dame and Vanderbilt that financial aid is awarded to a surprising percentage of families with incomes over 250K. Here’s my naïve question- do we need to file for FA at schools to receive any aid (aside from merit)? I feel odd submitting our materials if calculators show we’ll be full pay.
It’s your choice whether to submit the financial aid application forms. If you are OK not knowing whether you might receive some need based aid…and can be full pay, you really don’t need to complete the forms.
You might want to complete a FAFSA after your child decides which college to attend so he or she can access the Direct Loan, if desired.