<p>According to a local college financial aid expert, one way of reducing a parent's financial assets, relative to the financial aid calculations, is to move them into a Modified Endowment Contract, which is actually a life insurance vehicle. As I understand it, if done correctly, the assets no longer will "count" toward the expected contribution calculation, yet they are 100% accessible after only 12 months, without any penalties, regardless of the age of the parents. Apparently, this can also be done with the 529 accounts (meaning putting them "inside" of an MEC), such that they no longer count as well. Does anyone have any specific info on this approach?</p>
<p>This is discussed here:</p>
<p>Keep in mind that parental assets are assessed at a max of just under 6%, and that's only after the parental asset protection allowance (generally around 45K for most families) is exceeded. Most families don't have sufficient reportable assets to exceed the asset protection allowance, and for many that do, the final assessment due to assets is fairly modest, and may not warrant this sort of tactic (and the premiums and other costs associated with it).</p>
<p>If I recall correctly when filling out the CSS/Profile last year there was question asking the amount of "cash value" life insurance(I think this is the same or similiar to a MEC) we had.
We had been advisd by a "financial aid expert" to put all our home equity in a cash value plan but did not as it seemed too good to be true and he assured us that colleges would not ask about monies in this sort of insurance--but ours did
Buyer Beware</p>