<p>Yes. You are confused. And so am I. You have $200, you say, in an account in YOUR name. Your parents have about $6000 in the bank in their names. If you leave things as they are, you would report the $200 under the student section as YOUR asset because it is in an account under YOUR name. Your parents would report the $6000 in the parents’ section as THEIR asset because it’s in THEIR name. </p>
<p>What I was suggesting was that you reimburse your parents for expenses or pay off something so that you have zero in assets on the day you file FAFSA. Because your $200 is going to be hit up as $40 directly to your EFC. You have NO protection allowance. Your parents will have a protection allowance and even if they go over it, they are only hit up 5.6% of assets which adds at most $10.12 to the EFC for that same $200. If your family EFC comes to be very low, that $40 will come nearly directly off your PELL grant if you are PELL eligible.</p>
<p>Your student EFC is equal to 20% of your assets in your name/ownership on the day you complete FAFSA plus 1/2 of any 2014 income over about $6K. Your parental EFC is equal to 5.6% of parental assets over the protection allowance on the day FAFSA is completed plus some sliding % of their income as reported on 2014 tax return as AGI with some possible adjustment. </p>
<p>Thanks again cptofthehouse ~ didnt’ know about the $6000 student income = 50% contribution. D makes just under 4000/year every year since freshman in high school, hasn’t managed to save much with cars, insurance, etc. but had no idea what her EFC portion would be.</p>
<p>No, no, no. Under about $6000 for the year (exact number I don’t remember, look up FAFSA student contribution) is the student income protection. After that amount, = 50% of that excess. No income protection for student assets, but about $6K INCOME protection. </p>
<p>So your daughter can make up to about $6k in 2014 before having any of her income going towards EFC. However, any assets IN HER NAME or HERS, other than 529 money, sheltered money, as of the date FAFSA is completed, willl be hit up 20% towards EFC. </p>
<p>Parents have an asset protection allowance; students do not for FAFSA. </p>
<p>Be aware that FAFSA formulas are based on ASSETS as of the date FAFSA is filed, and the INCOME of the year prior. The two calculations are added together to get the EFC.</p>
<p>Am I the only one who thinks that a kid who has a couple of thousand in a bank account SHOULD be contributing it toward his college expenses rather than expecting more Federal Aid? I like to think that’s why my kids save their summer earnings.</p>
<p>thanks again cptothehouse, makes more sense. @Osprey, of course kids should contribute and have “skin in the game”, but the $ D has hasn’t been gifted to her in any way, its money she has earned and she has expenses like the rest of us. She bought her own car, has car insurance, gas is $40/week, etc. The car is not a luxury, its how she gets to her school 12 miles away every day, there is no public transportation or bus system. If she spends the majority of what she makes on college, who pays those expenses? $4000 is $76/week, doesn’t go far. With gas at $40/week and car insurance at $1200 year, there isn’t a lot left over quite honestly.</p>
<p>I know what you mean Osprey. But the rules are such so that savvy Student A who knows he should spend down, reimburse parents, so that he does not have $2K in the bank will get a zero EFC if he has zero assets, whereas is counterpart, in identical circumstances who does not, will get an auto $400 hit directly on EFC. Not a huge issue, except when you are talking about those who miss PELL eligibliity by just that much or if it puts a family over the Zero EFC point or other such things. It hurts those who need every dollar the most. And at some school the first year asset reported carries on for the next three years.</p>
<p>This is strategy that colleges themselves advise. As well as any articles on how to better qualify for financial aid. Those with savvy parents will have money in 529s and have other strategies, when some of these kids have been straight out saving, and saving their money, and to get hit 20% on it doesn’t feel right to me,when someone who blew the money with the same financial profile could be getting more aid. </p>
<p>The fact of the matter is that very few kids are going to get full need met anyways, so those few dollars on the EFC that gives a bit more PELL, more loan subsidy. can help. Few people are lucky enough to just be asked to pay EFC only unless we are talking low cost commuter schools.</p>
<p>Quick question: I have 95.75 in my account, but I wrote someone a check for 68 that hasn’t cleared yet… should I report my cash asset as 95.75 or 27.75… also I’am an independent student, will this effect my EFC at all?</p>
<p>If you are audited, what would be checked are the balances that day is what i was told. The check in the mail thing doesn’t work, though for such small amounts it’s not lkely to matter. For smooth sailing through an audit, you want to report the account balance, including outstanding checks. Checks might not get cashed,. </p>
<p>If you are audited, what would be checked are the balances that day is what i was told. The check in the mail thing doesn’t work, though for such small amounts it’s not lkely to matter. For smooth sailing through an audit, you want to report the account balance, including outstanding checks. Checks might not get cashed,. </p>
<p>If d has 2k in the bank today and she files tomorrow her assets are 2k. If she pays down the amount (bills in the amount if 1k) on Friday and we file fafsa on next Monday the latest account balance (1k) is the amount for assets we would put down?</p>
<p>Can’t I just close my bank account? I understand how students should contribute to their tuition. But I don’t understand, cuz like what if I just spend all or most of the money by the time I actually file my fafsa? Wouldn’t it have been better if I hadn’t opened a bank account in the first place, since student assets aren’t protected? </p>
<p>Is there a reason why student assets are not protected? Yes, I understand that students are expected to contribute to some parts of their tuition but this is a combination of money I saved up from christmas, birthdays and part time jobs, which I don’t even have anymore. I feel it’s unfair as most students have some people saved up and if they have a bank account, then they are penalized for it. I don’t want to be penalized and get less financial aid for having a bank account, for my parents already have a low income, which I thought would give me the full, or at least close to full pell grant. For reference, our income was 26,000, my parents have about 6,000 in their accounts and I have a little less than 200 dollars. Thank you for your help. </p>
If you have less than $1000 then it should be fine. Colleges expect you to contribute at least $2000 per year from work. Where do you put your saving if not bank account? You need to open a bank account when going to college anyway.
I had savings in between my mattress for emergencies. Now I put the $9,000 ( plus $5000 left over from grants, total $14,000) in the bank for safety. As an independent student, is there an asset protection allowance?
You do not include grant or financial aid funds. If you are verified, you could be asked for a trail of that account. If you can’t satisfactorily prove it, then it’s not so considered. If you put your grant money in an account, then the lowest balance between that day and the day your report it is considered the grant money, for example