<p>Okay, so I'm filling out the CSS Profile right now, and I've pretty much got it all figured out except for one part. There's a section that wants me to add up the total value of my mom's investments, and the part that applies to me is the 529 savings account part as well as a mutual fund she has. I'm confused/terrified about how a college will determine how much of what my mom has in those that will go toward my EFC. </p>
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<li><p>The 529: So my mom has five different accounts for me and my four siblings that add up to about $88,800. I'm fairly sure I'm supposed to put down that she has all of that, not just what she has in the one for me. My question is, will they divide that number 5 so they get what is just for me? And will they divide that again by 4 so see what can be used for just the first year? If for some reason they deem I can use all of what is meant for me my first year, I won't have a dime left for the other three years. </p></li>
<li><p>The mutual fund thing: So my grandma died last year and my mom inherited about 300K from her and it is now in a mutual fund. My mom absolutely without a doubt needs it for retirement, and even with it she won't have nearly what she needs to live off of after she retires. She intends to use it for retirement, and there's no chance it will be used for my or my siblings' college expenses. How can I possibly convey that to colleges? The Profile asks for what she has in an IRA or other account that is tax-deferred, but the mutual fund isn't. Do I count it as retirement because she intends to use it that way? I know I have to report that she has the money, but there isn't a section for funds allocated for retirement other than what is in a retirement-specific account. Should I have her move the money to something that wouldn't be considered for what she can pay? Is that even possible? This isn't money that was ever intended to be used for college, and we can't afford to have them say we have to take a huge chunk of it out to pay for college. </p></li>
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<p>I'm just really confused about it, especially the second part, so if anybody knows about this, I would love your insight as to what I should do. </p>
<p>I suggest that you call the financial aid offices of the schools to which you are applying and ask outright how 529 money in YOUR name vs sibling name, parental name is assessed for financial aid at EACH school. 529 funds in the student’s names for FAFSA purposes are considered parental assets and assessed at the lower parental rate for FAFSA purposes. So for FAFSA it doesn’t much matter if the 529 is in your name or your parents. I don’t know if it matters if its in your parents name or your siblings. I know that if in the 529 is OWNED by your parents it is counted as parental assets for FAFSA regardless of whose name is on it, yours or your siblings’, since that can be changed very easily. If it’s OWNED by YOU, it’s still counted as a parental asset to your benefit since student’s assets are hit at 20% towards EFC rather than 5.6% over a protection allowance for parents. </p>
<p>It’s all up in the air for PROFILE. Colleges can do as they please with their own money and PROFILE is how they assess assets in their own methodology. It is very possible that a 529 owned by YOU rather than your parents can be treated differently than if it is owned by your parent and named for your benefit or if owned by your parents and named for a sibling or other person’s benefit. As a rule, from what I have seen, sibling assets are included just like parental assets on PROFILE because of the way parents can reallocate assets among children. You can look at some NPCs and see if they are refined enough to show the differences in how 529s are owned, named, siblings vs student vs parent, but this is something I’d directly ask the financial aid director.</p>
<p>As for the money for retirement, it 's either in a qualified retirement vehicle or it is not. It doesn’t matter if she intends to use the money for her old age. She has it, she has the option and freedom to use it any way she wants do so. Everyone could say the same thing. When it’s locked away in a qualified retirement account, there are consequences to NOT using it for retirement and subject to all kinds of rules, so you get a break on it. It’s like telling the IRS that the earnings on that mutual fund should not be subject to taxes because your mother is going to use the money for retirement. Nope. You have to follow the rules, restrictions of qualified plans to get a benefit of it. Too bad if you can’t afford to have it counted toward college, If she didn’t get that windfall, she wouldn’t be hit up the 5% on it that she will be, towards your college. I suggest she look for places to shelter that money, IRA (roth or regular), 401Ks, HSAs, pay off the mortgage (some schools cap or don’t count primary home values) up to the max that she can so tuck away. But yes, it needs to be reported for both FAFSA and PROFILE. </p>
<p>Wow okay thank you so much. This really helps a lot! I’ll probably have her try to move what’s in the mutual fund to her IRA. That is possible to do right? Have her move it in the next couple of days and then just submit my PROFILE once it’s done? I’ve still got a couple of weeks until the deadline.</p>
<p>There are limits and rules about how much one can contribute to an IRA. She needs to talk to an accountant as to what she can do with the money. </p>
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OP, Your mom should discuss it with a tax expert.
You mom could move your 529 from HER NAME to YOUR NAME.</p>
<p>There are limits and rules about how much one can contribute to an IRA. She needs to talk to an accountant as to what she can do with the money. </p>
<p>I don’t think removing the 529 from the mother’s ownership to the student’s is a good idea. Some PROFILE school could then count the 529 as student asset if the student owns that 529. As I said earlier, they can do as they please with their own money. And a lot of schools do not just hit the students up at 20% student assets as expected contribution from them, but more. Some even track the initial asset amount over all 4 years, assessing it even if it’s spent. So it’s better off as a parental asset IMO than a student asset. </p>
<p>Okay, so what I’m getting out of this, is keep the 529 in my mom’s name, and have her talk to an accountant/other expert about the rest. As for the limit on how much can be moved to an IRA, supposedly at least some could right? And some is better than nothing at all? </p>
<p>I doubt I could talk her into paying off the mortgage especially since that might not even help. I’m thinking if she paid off her farm loans, it would just change the amount she owes on that so that’s probably not a good idea. </p>
<p>Also, my dad has some money for me (a couple thousand at most), and since it doesn’t ask anything about him in the NCP except how much he can contribute, could I reduce that amount?</p>
<p>Never mind about moving it, I don’t know if that will work anymore because my mom needs to be able to get at it in case things with our farm (which is doing terribly frankly) go so far south she can’t pay bills anymore. I ran a pretty accurate NPC for Vanderbilt (obviously assuming I get in), and it came out to be about 18.5K…</p>
<p>There’s a spot on the PROFILE where you can just write anything…If I explained my situation there, would it count for anything? Would they actually consider it/possibly factor it in to their calculations?</p>
<p>Never mind about moving it, I don’t know if that will work anymore because my mom needs to be able to get at it in case things with our farm (which is doing terribly frankly) go so far south she can’t pay bills anymore. I ran a pretty accurate NPC for Vanderbilt (obviously assuming I get in), and it came out to be about 18.5K…</p>
<p>There’s a spot on the PROFILE where you can just write anything…If I explained my situation there, would it count for anything? Would they actually consider it/possibly factor it in to their calculations?</p>
<p>It depends upon the financial aid office, but frankly, I doubt it. I wouldn’t give you an inch. You’re in better shape than most people. But give it a go. </p>
<p>I would not include money that you don’t know for sure you are going to get from your father or anyone It might just be added to your resources and if it doesn’t happen, then getting re evatluated for more could be a pain and not happen</p>
<p>Yeah, I’m guessing they wouldn’t care but I might as well try. There’s got to be a reason that section exists on it. I definitely don’t know what I’ll end up with from my dad, so it would be best to just put 0 there? Would they ask questions later if I ended up getting some from him?</p>
<p>People have some serious issues like raiding their 401K or having money set asside for a bone marrow transplant. That’s why. A friend of mine was let go from job, got severence/retirement in a chunk and used it to set up a business to support his family. That was his job. But it was a big enough hunk to wipe out financial aid for his two kids. He appealed, lost and so he had his kids sit out that year he had that big piece of one time income. That first year he did not make much money so the kids got financial aid, with two in college as well, and so by having the kids sit out that year, they made out. But note, the kids had to sit it out because their schools, two different schools, both that have great aid and a guarantee to meet full need refused to recognize the one time income bump. Also kids get denied at HPY and other generous schools for all sorts of reasons, even more urgent than yours. They call it EFC because they go after Every Friggin’ Cent, you know.</p>
<p>If your father’s money is not being included in the NCP statement and he pays anything for you, it will be included as income next year. Just as any child support is included. </p>
<p>Oh joy…okay, so would it probably be better to just put it down now? So if I think at most I can get 4K a year from him, I might as well just put that down? Or wait until next year comes around and I can report the actual amount I end up getting from him?</p>
<p>I’ve already got child support down, and that’s set to end for me at least next August anyway. That’ll slightly decrease my mom’s income at some point I think. </p>
<p>And then as for outside scholarships, I take it they won’t even matter because I need so much? It’ll just get put towards reducing what they give me right? So there’s literally no point in getting any. OR, would outside scholarships become income I have and they would only account for 50% of them?</p>
<p>Are there any other ways I can actually decrease what I have to pay besides loans? Or am I essentially looking at 10K in loans a year?</p>
<p>Thank you so much for helping me through this by the way.</p>
<p>No. Don’t put it down now. Put it down when you have gotten it. Child support that you know your mother gets this year, you put down. </p>
<p>Schools use merit awards in different ways. Many of the top schools reduce loans and self help first with it, so, yes, go for them. You also don’t know what you’ll get from any given school till it’s on the table. </p>
<p>It depends upon the school. Some schools don’t give out loans and you can then use the Direct Loans to reduce your family expected contributions. </p>
<p>You might qualify for a full tuition scholarship at Temple University and get Honors College privileges. That is pure merit. Any outside awards you can use as you please. You can still take out the loans to pay room and board and other expenses. There are a lot of variables in this. </p>
<p>Alright, not putting anything from my dad down.</p>
<p>And really? There’s a chance, even just a slight chance, that they would use them to make my loans less?! That makes everything seem a little less bleak. I know there’s definitely some local ones I can probably get if I go after them, so I’ll try for those and see what happens. </p>
<p>If I get scholarships after I’m offered a certain amount of financial aid, would I have to report those right when I get them, or just wait until next year’s Profile and FAFSA? Because at the moment I don’t have a dime of scholarships so I don’t how that would work…</p>
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<p>Contributions made to a Roth IRA (but not any earnings) can be withdrawn at any time for any reason, tax and penalty free, so if your mom used the money to make contributions to a Roth IRA, she could get to it at any time. That’s the good news. The bad news is that the most that any one person can contribute to a Roth IRA in any one year is $5,500, or $6,500 if the person is 50 or older. So it would take a while for your mom to make a significant dent in the $300k that she got from your grandmother if she chooses to invest it in a Roth IRA.</p>
<p>Still that is $5500 or $6500 each year to be shielded and there are other siblings in the picture. Also if she can put money into an HSA that is another $6k or so, to shield. </p>
<p>True, that might shave off a little. I think I’m going to try to contact some of the schools I’m applying to and see exactly what they do with outside scholarships, because if I could somehow use them to decrease possible loans, then that would help a lot. At least by my junior year, wherever I am, my sister will be in college as well, and then by my senior year my brother will be too, so hopefully that’ll help at least a little. </p>
<p>And I’ve got some college credit already, so taking Vandy for example, each of theirs is worth like $1700. So if I’m able to transfer over even half of my 16-ish credits, that’ll save huge amounts. </p>
<p>The outside scholarships though. If there was some way they could allow that to make up the difference, it would put me in a much better situation. I wish they would be more open about exactly what they do. HAHA. As if that would ever happen. I just wish I knew what was going to come of it. </p>
<p>But I’ve basically realized that I’m going to get screwed over no matter what unfortunately…</p>
<p>I fixed a couple things on the NPC, and now my EFC is up to about 22K.
Oh joy…</p>
<p>Captain has given you great advice. I think with a $300k (or $295k after the first IRA contribution) nest egg, your bestb bet might be looking at a merit school. Temple is a great idea. University of San Francisco and University of Portland give generous merit. </p>