<p>I agree, the $1500 is easily knocked out with the summer job, the work/study is pretty straightforward. That leaves the Stafford and only $3500 at that. Even if the student had to assume a less than full Stafford each year a big chunk of that would be paid down with the funds from the trust at age 21 and also hopefully the trust will grow abit over the next 3-4 years. Not a bad situation at all.</p>
<p>I have a similar situation and the account (trust/utma/ugma) is counted as a student asset (rather than income) and by FAFSA 20% of student assets are expected to be contributed annually and by CSS Profile (typically) 25% of the assets are expected to be contributed annually. SO if you have $6,000 at a Profile school you will expect to spend $1,500 per year (typically). If you spend it down in the first year (use all $6k instead of 20%/25%) you may STILL be expected by some privates to contribute the original 25% per year. There are some schools that explicitly say this on their website so either way a private typically figures you will use that account for college (accessible or not). BUT at a typical Profile school you will not be expected to spend more than the account is worth (with the caveat that it will grow, hopefully, until he/she is 21!).</p>
<p>My problem was it got counted all during private high school and now college - in that case they do expect you to pay it twice!</p>
<p>*SO if you have $6,000 at a Profile school you will expect to spend $1,500 per year (typically)…</p>
<p>BUT at a typical Profile school you will not be expected to spend more than the account is worth (with the caveat that it will grow, hopefully, until he/she is 21!).*</p>
<p>Now that makes more sense. He’s going to a CSS school, I think. He’s going to an ivy.</p>
<p>For FAFSA, student assets are only assessed at 20% per year, not likely the $6K is contributing that significantly to the expected contribution even at a Profile schools. I don’t think a loan, or portion thereof, could be legitimately considered a factor in reducing the net asset value unless the trust is actually used as collateral.</p>
<p>Can a passbook loan be taken out against a trust? Could someone else make the student a loan using the trust as collateral? Would that allow the value of the debt taken against the asset to allow you to report the net value (asset value - loan value)?</p>
<p>Loans are not factored into the financial aid situation in ANY way. If someone grants this kiddo a loan using his trust as collateral, that would in no way affect the value of the trust…not at all. The trust amount would remain the same unless money is drawn OFF of the trust or it’s value tanks somehow.</p>
<p>Thumper, isn’t the reported asset value for FAFSA the net value? Pretty sure you always reduce the value of assets by the loans against them. For example, if I borrowed money to invest in a “hot” stock or commodity, I would not have a value of x shares times market…is there a special rule regarding trust values?</p>