Prepaid tuition: fin. aid award vs. parents' contribution

Parent Cafe
6

<p>Aussie -</p>

<p>That interpretation was the exact interpretation for all of the awards packages we recieved from schools to which we had to submit the Profile. It is, unfortunately, the common approach. While contributions to a 529 plan are considered assets and only that portion (something like 8%) are considered part of the EFC, 100% of the prepaid tuition $ is considered a resource for to be used for college, akin to an outside scholarship. Probably, you will find that the school in question offset that part of the package that would otherwise have been work study and loan by the amount of the prepaid tuition they expect you to fork over (probably about 25% of whatever the current value is) so, in a way, that is a positive. Hopefully, part of the package was direct grants and very little of it loans. </p>

<p>I first checked into to this alarming reality on Collegeconfidential by visting the financial aid section on the home page, and it led me various places, one of which was the section on financial aid at the College Board website, so I don't think its a problem to refer you to the following link:</p>

<p><a href="http://www.collegeboard.com/article/0,3868,6-29-0-8851,00.html%5B/url%5D"&gt;http://www.collegeboard.com/article/0,3868,6-29-0-8851,00.html&lt;/a&gt;&lt;/p>

<p>IF you go googling, you will find a lot of information out there about this. Try also: <a href="http://www.savingforcollege.com%5B/url%5D"&gt;www.savingforcollege.com&lt;/a&gt;&lt;/p>

<p>Make sure you are correctly categoring your prepaid tuition - that it isn't really 529 funds because, as stated, they would work more in your favor. </p>

<p>Now that I have adjusted to the reality that the prepaid tuition funds were not going to be a pool I was going to be able to tap to come up with the EFC but rather added $ for $ to the EFC, I console myself with the fact that my child (and I) will have fewer loans than I might have. Can't help thinking that I would have been further ahead by not saving at all, but I have finally made that mental adjustment and figure that if the college deems our family capable of what they ask, on top of the prepaid tuition $, I have to somehow figure out how to come up with it. </p>

<p>Boy do I sympathize with your shock though.</p>