<p>I went to a little seminar about finanical aid at my high school. And the speaker said that in order to recieved the most financial aid possible students should chose their bank accounts 9or something along those lines).
Is that true?
Any opinions or comments on this?</p>
<p>Student assets have a bigger affect on the EFC than parent assets as 20% of them go to the FAFSA EFC. So if a student has $1000 in the bank the EFC will increase by $200. However the assets are reportable whether they are in the bank or under your mattress. If you have any items that are going to be purchased anyway then it is a good idea to purchase them before the day you file FAFSA. For instance if the $1000 is earmarked to buy a computer then buy it before filing FAFSA. If the $1000 is needed for college expenses then don’t spend it merely in an attempt to get more aid that you might not even get. </p>
<p>Same goes for parents, although they have a certain amount of asset protection based on number of parents and age of the older parent, and the % of assets that goes to the EFC is lower. For instance if you have money in the bank to fix the roof, fix the roof before you file FAFSA. Money in the bank = reportable asset. Fixed roof = not reportable asset. About to buy a house? The house buying money in the bank = reportable asset. Money invested in primary home = not reportable asset (for FAFSA). Going to put money in a non Roth IRA? Money in thebank = reportable asset. Money in the IRA = non reportable asset (though the income is not reduced by the annual contribution).</p>
<p>Reducing assets before filing FAFSA by purchasing things you have to purchase anyway is a good idea and a perfectly legitimate strategy. Timing is important. Paying the expense the day before you file FAFSA makes it not a reportable asset. Paying an expense the day after you file FAFSA makes the money a reportable asset. So pay your bills first. Reducing assets them by attempting to hide them is not a legitimate strategy and is fraud. Never a good idea - and lying on federal documents even more so. Reducing them by spending them on things you did not plan to buy just to attempt to increase financial aid is plain stupid, as you still may not get financial aid and now you have less money to pay for school and related expenses.</p>
<p>Thanks for the info?
So the premis is that the less money reported the better?
And that the less money reported = more money in financial aid?</p>
<p>So do they (the FAFSA people) check both my accounts and my parents or just mine?</p>
<p>have you considered putting it into a roth IRA? (if you work)</p>
<p>
If you have the money it must be reported. You and your parents have to report all your bank accounts and any other assets (stocks, bonds, savings bonds etc). If you lie on FAFSA you can be fined or even imprisoned and you can lose all aid you have been awarded and have to repay any aid you have received.</p>
<p>
Not necessarily. It depends on how high your parents and your income is as well as your assets. Income has a much higher effect on your EFC than assets unless there are a very large amount of assets. Your ‘need’ is based the difference between the schools COA (cost of attendance) and your EFC (Expected Family Contribution). If the school’s COA is $20,000 and your EFC is 25,000 you will have no ‘need’. If you reduce your EFC to 21,000 it will still be higher than the COA so you will still have no ‘need’. When there is need it may be met by a combination of grants (federal grants require a very low EFC), loans, and work study. Many schools do not promise to meet full need.</p>
<p>Also, try out one of the online EFC calculators; you’ll need some guestimates of income tax ##s, though…</p>
<p>What happens if you take all of the money in your account and buy savings bonds?</p>
<p>Savings bonds are a reportable asset for FAFSA. All reportable assets are treated the same way by the FAFSA EFC formula.</p>
<p>Basically the only financial assets that you do not have to report on FAFSA are your primary home and savings in retirement accounts such as IRAs and 401ks. Any other assets - bank accounts, savings bonds, stocks, real estate other than the primary home - are reportable assets, must be reported, and will be used in the EFC formula. Moving money from the bank to savings bonds or to stocks makes no difference. An asset is an asset is an asset.</p>
<p>This was in response to the question that now appears after my response. How odd.</p>
<p>As swimcat stated, savings bonds are a reportable asset and must be reported on the FAFSA.</p>
<p>Plain and simple…the only legal ways are to either a) spend the money or b)move the money into 401k’s or IRAs.</p>
<p>(That was weird, I actually posted this after little mikey’s post.)</p>