Money is very, very, very tight. My D has a little under $1,000 in an UTMA account. We are trying to figure out if it makes more sense to leave that to potentially grow a little bit until next fall, or cash it in right now and pay this spring’s tuition, books, etc. One consideration is how it’s looked at for grant money/ FAFSA/CSS EFC. It that counted as student assets and automatically adds 20% to her student EFC? It is currently the only asset in her name other than about $20 in the bank.
Does anyone know how this type of account is considered?
Yes, it counts as student assets. See http://www.forbes.com/sites/troyonink/2014/02/14/how-assets-hurt-college-aid-eligibility-on-fafsa-and-css-profile/ For example,
It counts as a student asset for FAFSA purposes unless it’s in a 529 account, where it will count as a parent asset. UTMA money in a 529 account may or may not count as a parent asset for CSS/Profile purposes, depending on the school.
I would pay expenses with all of it now before completing the FAFSA or put it into a 529 before completing the FAFSA.
Thanks so much, folks. Really appreciate it! We do have a 529, so perhaps it makes sense to pay expenses and then transfer the remainder into the 529?
If the existing 529 is a student-owned account, yes, that might make sense. If the 529 is not owned by the student, however, you don’t want to mix UTMA money in there. You could always open a new 529 account with your daughter as the owner, using the UTMA money.