FASFA impacted by child's savings

[PJJ]

Hi,
Does a child's savings greatly impact their FASFA?
Have any of you place the money elsewhere?
It is my understanding that retirement savings does not impact FASFA.
What else does not?

Thanks!

[Inquiringmind]

Yes! It does! If at all possible, put the money somewhere else. Even if it's in your name, a lower percentage will be considered "available" for college expenses.
This was very frustrating to me in college. The more I worked to be able to afford school, the lower my financial aid.
Good luck in figuring out what to do!

[Katie Bugs Mama]

Definitely. Anything that is in the child's name is considered to almost entirely available for college tuition.

Due to a huge and painful family drama, my estranged grandmother just set up two trust funds for DD. I insisted that Gramma make the money completely inaccessible to DD until the age of 30 so that DD isn't automatically disqualified for college financial aid.

Maybe you could do something similar?

[neetling]

I am concerned about this as my children will receive a trust when they turn 18. I have been told (not sure how true it is) that if they put the $ into a retirement account it won't count against them as much. We have no control over the cash so we'll probably need to seek guidance as they come of age.

[kijip]

Yes it is, however if a child has significant savings or trust money I can't imagine not wanting that used for college. Much FAFSA accessed aid for families with middle class incomes is loan based. I would want my child to avoid student loans at pretty much all cost.

[neetling]

Originally Posted by kijip

Yes it is, however if a child has significant savings or trust money I can't imagine not wanting that used for college. Much FAFSA accessed aid for families with middle class incomes is loan based. I would want my child to avoid student loans at pretty much all cost.

I am not sure if you are addressing me or the OP, but we have a semi unique situation in that the trust is from a NA tribe that the children will also have a lot of additional financial help for schooling from. Our oldest is 5 so we have a lot of time to figure it out.

[kijip]

Originally Posted by neetling

I am not sure if you are addressing me or the OP, but we have a semi unique situation in that the trust is from a NA tribe that the children will also have a lot of additional financial help for schooling from. Our oldest is 5 so we have a lot of time to figure it out.

I am not addressing anything but the question. If your children will get college assistance from the tribe as well, that is great. But generally speaking, I think that if college can be paid for out of current resources or grants, that is better than taking on a student loan burden even if it is a Stafford or Perkins loan via the FAFSA application.

[Katie Bugs Mama]

Originally Posted by kijip

Yes it is, however if a child has significant savings or trust money I can't imagine not wanting that used for college. Much FAFSA accessed aid for families with middle class incomes is loan based. I would want my child to avoid student loans at pretty much all cost.

I don't want dd to be buried in student loans; however, I also didn't want to create a situation in which she didn't qualify for *any* grants or subsidized loans because of the trust funds from my grandmother.

Also, the trust funds aren't huge by any stretch of the imagination now, but they will be much larger after sitting and accumulating interest year after year. I didn't want dd to have unfettered access to that much money at the age of 18. I think that it is too big a responsibility for any teenager. That-- more than worrying about college financial aid--is why I insisted that she not have access to the trusts until she was 30.

[AuntNi]

Originally Posted by kijip

Yes it is, however if a child has significant savings or trust money I can't imagine not wanting that used for college. Much FAFSA accessed aid for families with middle class incomes is loan based. I would want my child to avoid student loans at pretty much all cost.

ITA with this! If my DD is lucky enough to come into significant funds of any kind, I would want that to pay for her education. If she comes through college loan-free, then she can work on building up her own retirement savings. I will go so far as to say that I think "gaming" the FAFSA system is unethical, because it takes money away from kids who really *need* financial help for college.