Sorry. You guys are right about the checking account. I guess I was thinking about the mortgage case. If you do something like make a years worth of regular mortgage payments, then fill out the financial aid forms, each month you can take the money that you would’ve used for the mortgage payment and put that in the bank. That way it is never counted as an asset.
You are doing a LOT of financial gymnastics here that might not net you a penny more in need based aid.
If it’s a full need school, I can’t imagine you have to worry about getting more (or less) money. I’m surprised they have any incentive at all to do it early.
If this is a full need met school…perhaps the ONLY thing you would gain by meeting this earlier deadline is an earlier award notification.
Is your son an entering freshman or a returning student? If he is a returning student, are you sure this preferred deadline" is for returning students?
^ I haven’t done anything yet. Just talking. But not sure why you view this as alot of financial gymnastics. It certainly depends on the school and the situation.
Just looking at my case where home equity doesn’t count. I currently have about $20K in home equity line of credit. It would be trivial on Jan 1 to take out money from my 529 and pay off the $20K HELOC. Then, in August when the tuition bill arrives, I can take the money out of the HELOC. For almost no trouble, I may get about $1K in more aid (5% * $20K) plus I don’t have to pay interest on the HELOC for 8 months. I guess I would lose 8 months of growth in the 529, but considering I need the money this year, it would’ve been parked in a fixed income asset. My guess is I’d be saving more not paying interest on the HELOC.
I agree that because it’s a full need school that the deadline probably doesn’t mean anything other than early notification. My son is coming in as a freshman after doing a gap year. So, he’s already accepted into the school. I did get an email about the early deadline, so I assume it meant something for us.
If he is an incoming freshman, the deadlines for freshmen apply, even if he took a gap year.
Since he has taken a gap year, and will BE attending this college, I’m not sure early notification matters other than for budgeting purposes. So…my suggestion is file the fafsa and Profile when your assets are lowered…and since the school meets full need, it shouldn’t matter.
Did he get a financial aid package last year that was affordable? Your forms this year will use the same tax year information. How much more in assets do,you have now?
Yes, he received a package last year. Of course, everyone believes they should get more, but it was acceptable and within my budget, although the high end of the range of what I expected to pay.
As for my assets, they really haven’t changed that much so i expect everything to be similar.
Thanks to all who replied.
The only thing left for me to figure out is when will my assets be lowest. Obviously, small amounts don’t matter much at around 5% used by the schools.
Have you tried running the net price calculator on the college website for this year? Does it compare to the package from last year?
Just keep in mind that the net price calculators are set up for incoming freshmen. But at a school where full need is met, really, the NPC would be a good start. You could also run it with, and without getting asset amounts reduced. See if there is a difference.
But if you are divorced, own a business, are self employed or own real estate other than your primary residence, this might not be accurate.
Good ideas. I’m pretty sure I’m not divorced, own a business, self employed or real estate other than my primary house. I may have to double check the divorced one.
Prepaying a mortgage is tricky unless you work it out with your servicer in advance (and even then, still tricky). Say your mortgage is $1000/mo and you decide you want to pay $6000 for six months. Unless you tell the mortgage servicer that you are paying 6 months of payments, they are going to calculate the interest accrued since the last payment (say $600), take the taxes and insurance for that month (say $200) and apply the rest to principal. Normally that is $200, but this month it would be $5200. The next month they are going to expect a payment, take the interest that has accrued since the last payment (and since the principal is lower, the amount that has accrued will be lower, say $590), still want the $200 for taxes and insurance.
It is no different when you pay any credit payment. If the minimum credit card payment is $25/mo and you pay $75, you don’t get to skip the next two payments.
^good point. I’m not positive, but I believe banks can do it as regular payments. Certainly it can be done with paying off a HELOC. And there may be other bills as well that can be prepayed (maybe oil). I really haven’t looked into it too much. The only one I was considering was paying off my HELOC.
I believe the real risk here is if your child decides not to go to school in the Fall.
I’m going to paraphrase advice that has been given frequently by another really terrific poster.
Do NOT do anything for financial aid gain that you would not be planning to do…anyway.