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Financial Aid for College
Old 07-27-2008, 08:01 AM   #1
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Financial Aid for College

Hi everybody:

What are the key factors that determine whether or not a son or daughter can receive financial aid for college?

Is it current income level, net worth, if parents own a home, etc...?

Here's my sister's current situation:

My mother, who is still alive, transferred mutual fund assets to my sister's name a year ago. (roughly $250,000 and my sis now pays the yearly dividend taxes) My mom was hoping this money would grow for them and NOT be used for college payments. By the way, the reason for the tranfer was to avoid any potential nursing home costs down the road. (Yes, I know of the 5 year look back period.)

So, will my sister's kids be able to qualify for financial aid? I'm sure they can still can apply for student loans.

I hope I provided enough information for opinions?

Thanks, all!!!

Space Mountain

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Old 07-27-2008, 08:50 AM   #2
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My understanding was that the formulas looked at current income and current assets, generally from last year's records. I'm no expert, but my understanding is that retirement accounts and home equity are shielded, but mutual fund that were gifted in a taxable account (no matter the "reason" behind the gift) are fully considered assets.

You might do some internet searching, such as: Financial Aid and Your Savings

  • Quote:
    • 20% of a student's assets (money, investments, business interests, and real estate)
    • 50% of a student's income (after certain allowances)
    • 2.6%- 5.6% of a parent's assets (money, investments, certain business interests, and real estate, based on a sliding income scale and after certain allowances)
    • 22%-47% of a parent's income (based on a sliding income scale and after certain allowances)

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Old 07-27-2008, 05:59 PM   #3
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Originally Posted by Space Mountain View Post
Hi everybody:
What are the key factors that determine whether or not a son or daughter can receive financial aid for college?
Is it current income level, net worth, if parents own a home, etc...?
I know that a personal residence is specifically included from the FAFSA. Real estate is a little more pricey in some areas than others, which was locking out people who needed college financial aid because their cost of living was higher.

But you've reminded me that I need to start spending some time on the college discussion boards like College Admissions, Search, and Financial Aid Help from College Confidential .

The book written on, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
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