This is our tough year, with both of our “kids” in college. Son will be graduating in May - our daughter is in her first year. We have had a more challenging year financially as well. We have been paying via a payment plan for our son (he has a lot of merit/grant) and have enough to pay our daughter’s tuition for this year. We live quite frugally, and if her grant aid does not change too much (I checked with the aid office) then while it will be tight, we should be ok.
Question: My daughter’s Spring tuition is not due until mid January. If we leave the 10,000+ in the account until January, does this count against our awarded aid for the next year? Should I pay the tuition ahead of time, before the bill comes out, in late December, so that the savings are gone as of December 31st? (For the FAFSA application filing.) With the new APA formula coming out for protected savings, I am not sure how this will all play out. Thank you!
I am planning to pay both semester’s fees in July and Dec to maximize the AOTC I can claim for 2015 (tuition is covered by scholarship). So yes in your case if I had the money in the bank and could pay in Dec I would. When does the bill come out?
This money is earmarked for you to pay tuition, but if you file FAFSA you must disclose assets as of that day so it makes sense to pay it before filing FAFSA. Our APA is supposed to go down from $30 k to $8 k. Yours might be similar.
I don’t think you have to pay it before Dec 31 unless you want to. You can pay it anytime in Jan before filing FAFSA. Just make sure it clears the bank. Assets balances are reported as of the day you file FAFSA.
Wow, this is such a great resource. Thank you @mommdc. I made an error with syntax - the bill comes out in January, but I meant, should I pay late December. Thank you!
@mommdc, Oh, yes! I forgot that the FAFSA only takes into account assets as of filing, not as of December 31st. So, as we already will have a lot for AOTC this year, (between my son and daughter) then it makes more sense to pay in January, as we are anticipating a slightly better year next year, and will want to maximize AOTC for next year. Thank you!!!
Some folks have tax reasons to pay in this calendar year. If thats true for you, pay it in 2015. If not, then as others have said, its just a matter of how much $ you have on the day you file your FAFSA.