Which is worse for the student as far as financial aid goes, for the student to have $20k savings account freshman year (“asset”), or if a relative would give the student $5k each of the student’s four years (“untaxed income”)?
Perhaps I am also asking , what are the relative weights of student income vs student assets in financial aid? assume a css profile school. I suspect the amts are important.
I think I read for the parents at least , that income has more weight in the FA calcs than assets - true?
from my recall, please double check. If you use ‘search’ you can find posts with the link to the FAFSA calculation. Cut CSS, I don’t know.
for FAFSA
student assets 20% assessment, no protection
parent assets 5.6%, after protection
Student income 50 pct after protection
Why doesn’t the relative give the money to the parents and the parents pay to the school?
You do NOT want a student to have $20k in savings!!
Better to have the relative GIFT the money to the PARENT each year to pay towards college…then the money doesn’t hurt Fa at all.
would the gift action to the parents then be put under ‘other untaxed income’ n the parents portion of css (and fafsa)?
^^ No, a gift to the parent is not income.
two (or anyone), where on fafsa and css would this gift money be put?
css has an area called ‘parents 2014 income and benefits pi’ and there is a question called
pi-225a. Is this the one for css that wd include gift aid from a relative for the strudent?
‘Enter the amount of other untaxed income your parents received in 2014. See the worksheet for types of income to include and the instructions for types of income to exclude’
i see that there is a wksheet attached to this q…looks like PI-225WT might be the spot? it does include the word benefits in addition to income. this can be explained in the narrative section, I suspect.
Worksheet for PI-225A
Complete the worksheet below and click on “Calculate.” If the total is correct, click on “Accept.” The total will be moved to the answer box on your PROFILE Application. The worksheet only accepts whole numbers.
Worksheets are provided to aid you in your calculations. The information you provide in the worksheets will not be reported to your colleges and programs; only the totals that are moved into the answer box within the application are reported.
Help Code
Any untaxed military service benefits not reported elsewhere on this application + PI-225WM
Workers’ Compensation + PI-225WO
Black Lung Benefits, Refugee Assistance + PI-225WP
Untaxed portions of Railroad Retirement benefits + PI-225WR
Any other untaxed income and benefits + PI-225WT
Curiously, the similar question for the prior r, 2013 is phrased more aptly for this condition…i dont know why the 2014 question is not phrased this way.
Cash received or any money paid on your behalf (e.g., bills) + PP-115W5
there is sr-165a , but that is in the student’s area .
@roderick cash given to the parents as a gift , which the parents then pay tuition is not reported.
Cash given to the CHILD to pay tuition would get reported.
thanks, mom2. I was going to ask for back up for your stmt, but thinking about it, this money would already have been reported in parents assets - cash checking saving. correct?
Roderick…in terms of asset reporting…the money would need to be in the bank account as of the date of filing the FAFSA or Profile to be listed as an asset. So…no…it might not already be listed as such.
If the family gets the money in, say December, and uses it to pay the bill for the spring term immediately, then files the FAFSA, the money would not be counted as an asset.
Assets are monies IN your possession as of the date of filing.
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thanks, mom2. I was going to ask for back up for your stmt, but thinking about it, this money would already have been reported in parents assets - cash checking saving. correct?
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Not necessarily.
The relative can give the parents the money AFTER they file FAFSA
But even if the money were in the parents’ possession, then it would only be assessed at about 6%…and that’s AFTER parent protections
‘But even if the money were in the parents’ possession, then it would only be assessed at about 6%…and that’s AFTER parent protections’
– I was under the impression that parental soft assets were exempt from financial aid assessment to the age of the older parent - in this case 50 YO for 50 K - so this is an incorrect impression?
Are such parental assets subject to 6 pct of their value even if under the 50k ‘protection’? So they’d take 30k*.06 = 1.8k?
At what pctg do they take student assets?
Someone may have made a stab at the exemption being equal to the age, but there is a chart, based on the age of the older parent in a two parent family. The older you are, the more protection. For single parents, it is about 1/4 of the amount allowed for a two parent family. Mid-50’s is about $10k in protection.
Student have no protection. If there is an asset on FAFSA filing day, it is assessed at 20%, so $1000 in a bank account means the student is expected to contribute $200, and the EFC will be increased by that amount.
The asset protection is NOT equal to the age of the older parent…at all. Actually the asset protection allowance has decreased quite a bit. There is a chart which shows the amounts…but if I’m not mistaken, the highest amount is in the mid$30k range now…not higher.
I don’t think students have an asset protection allowance.
For fafsa, student assets count 20% toward EFC with no asset protection allowance.
For fafsa, the parent asset protection allowances are on page 19, table A5 in the fafsa formula guide:
http://ifap.ed.gov/efcformulaguide/attachments/090214EFCFormulaGuide1516.pdf
The asset protection allowances have been dropping the last 4 or 5 years due to the formula that sets them being influenced by low inflation the last few years. It’s actually 5.64% of assets for parents who are in the 47% bracket in table A6 and only on the amount over the asset protection allowance.
This would only be for those who don’t qualify for the simplified formula or auto 0 EFC where assets don’t count at all.
what are the eligibility criteria for the simplified formula or auto 0 efc?
also, to be clear here : are the rules being talked here about asset protection applicable to a private school that uses both css profile and its own FA application for inputs along with FAFSA?
copying thumper’s comment from last on the subject, my niece should have recvd auto efc 0 but was instead assesed a 1,200 efc. I wonder why.
in an auto efc 0 case, do they look at student assets? or are they protected?
‘For the 2014–2015 Award Year, a dependent student automatically qualifies for a zero EFC if both (1) and (2) are true.
(1) Anyone included in the parents’ household size (as defined on the FAFSA) received benefits during 2012 or 2013 from any of the designated means-tested federal benefit programs: the SSI Program, SNAP, the Free and Reduced Price School Lunch Program, the TANF Program7, and WIC; OR
The student’s parents:
• filed or were eligible to file a 2013 IRS Form 1040A or 1040EZ8,
• filed a 2013 IRS Form 1040 but were not required to do so9, or
• were not required to file any income tax return; OR
the student’s parent is a dislocated worker. AND
(2) The 2013 income of the student’s parents is $24,000 or less.
• For tax filers, use the parents’ adjusted gross income from the tax return to
• For non-tax filers, use the income shown on the 2013 W-2 forms of both parents (plus any other earnings from work not included on the W-2s) to determine if income is $24,000 or less.’
http://talk.collegeconfidential.com/financial-aid-scholarships/1651343-automatic-0-efc.html
Read pages four and five in the link AD provided above. That detail ,the Simplified Needs and Auto $0 criteria.
i see that the link that annoyingdad provided has info about auto 0 efc.
so if auto 0 efc is true, they dont look at assets of either the parent nor the student?
The link AD provided has info about auto $0 and about simplified needs, and just about everything else that pertains to the fafsa.
Yes…for auto $0 the assets are not counted.
But remember, this is for fafsa calculations only. If the student attends a Profile school…or a school with its own financial aid form, there is no auto $0 or simplified needs test for those forms.
the school is a css school so there are different rules, apparently inscrutable rules , to determine efc. but one question on the pell, which is a federal entity and presumably is determined by the federal methodology for efc: if one satisfies an auto 0 efc with Fed methodology, would that mean one wd get a full pell? or is the pell determination also affected by the Inst methodolgy?