<p>Two years ago, when I first started working, I started putting about 15% of my paycheck into stock investments, in order to learn more about the market. It's a custodial account for me (but not sure if it falls under mine, since my parents are the custodians) with an online trader. It has around $5,000 in it right now.</p>
<p>How does this work with financial aid? Am I supposed to sell the stocks and put it toward college or does it only count toward the EFC if I sell the stocks? Any ideas? I don't quite understand it.</p>
<p>Your stocks are an asset and you will list the current value on your FAFSA -- your monthly statement should give you that number. It will be treated the same as a bank account -- that is, 20% of the value will be added to your EFC.</p>
<p>It is up to you how to handle meeting your EFC -- you could choose to sell your stocks or you could choose to raise the money for EFC from a different source. But a stock investment account is something that is very easy to liquidate --that is, with an online trader you could put in a sale order today and have cash tomorrow -- so it is an asset available for you to use for college if you so choose. </p>
<p>From a financial aid standpoint it is best for you to spend down assets as much as possible during the first year -- that is, you are better off in terms of financial aid if you liquidate the account and put all $5000 toward your education in year #1. </p>
<p>However, in terms of money management, the financial aid benefit does not necessarily correspond with your own long term benefit. That is, if your parents are willing to support you and pay for college, then spending $5000 in order to reduce your EFC by $1000 in subsequent years may not be the soundest investment strategy -- you've spent $5000 in order to save $3000. </p>
<p>The one huge mistake I see people making over and over again in terms of understanding financial aid is to look at their college costs as if that is the only factor -- when I think the real issue is to look down the line 4 years and figure out how much you will then have in terms of assets & liabilities.</p>
<p>There is an alternative - since you are working, I think you can put money into a Roth IRA -- that will shelter some of the money from consideration on the FAFSA, and it would enable you to keep money invested in stocks if you so choose.</p>
<p>Congratulations on learning to save and invest while in hs! Don't sell anything until you know your estimated EFC; if your family's estimated EFC is very close to the total cost of college, your only financial aid may very well be work study and loans (or nothing) anyway, so you want to have assets available. The capital gain income on a sale in 2007 would be reportable income anyway for financial aid purposes if you're applying for 2008-2009 year.</p>
<p>I usually print out or save the most recent account statements from the prior month and use that as the value, and keep those statements with my FA records as documentation.</p>
<p>So then if you had a high balance at one point during the year, but then either liquidated some of your stocks, or simply lost money, you would not be affected be the a high prior balance if at the time you are doing the fafsa your account contains less?</p>