When Do I Have to Do Fafsa Again
FAFSA Tips: How to Shelter Your Savings and Get More than College Aid
The Free Awarding for Federal Pupil Assist or FAFSA looks at both your family income and assets in determining your eligibility for higher aid.
In a previous mail service, I outlined steps you can have now to reduce the income yous must written report on the FAFSA. This post explains the other function of the equation—how to shelter your assets to maximize your aid.
In that location are basically ii types of assets for FAFSA purposes: those yous take to report and those you don't.
Your reportable assets include banking company and brokerage accounts, CDs, stocks, bonds, mutual funds, coin market accounts, college savings plans, trust funds, real estate, and other investments.
Your nonreportable assets include the equity in your family dwelling, qualified retirement plan accounts (including pensions, annuities, IRAs, 401(one thousand) plans, and similar accounts), and whatever small businesses owned and controlled by your family.
To get the almost financial aid, consider shifting some assets from reportable categories into nonreportables ane earlier you sit downward to fill out your FAFSA. (The asset information yous supply on the FAFSA is basically a snapshot of your finances at that point in time.)
For example, you might utilise some money from reportable assets like bank accounts and common funds to pay downwards the mortgage on your abode, which doesn't count equally an asset on the FAFSA. (However, your habitation equity is considered, up to sure limits, on some other fiscal assist form, the CSS/Financial Aid Contour, which is used by almost 200 colleges for awarding their own funds.)
Also, effort to pay down other forms of consumer debt, such as credit menu balances and auto loans.
Comport in mind that if you sell any assets that issue in capital gains, those gains could raise your income and bear upon your eligibility for assistance.
Finally, maximize your contributions to retirement plans in the years leading upward to college because those aren't counted against you, either.
At that place are two other FAFSA provisions that will affect some families:
- The simplified needs test. If parents' adjusted gross income (AGI) is less than $50,000 and your family satisfies certain other criteria, the simplified needs test volition disregard all of the assets you report on the FAFSA. To qualify, the parents must have been eligible to file an IRS Form 1040A or 1040EZ, someone in the household must accept received ane of several ways-tested federal benefits in the last two years (such every bit SSI, SNAP, TANF, WIC, or the Gratis and Reduced Price School Lunch), or one of the parents must be a dislocated worker.
- The nugget protection allowance. This allowance shelters a portion of reportable parent assets, based on the historic period of the older parent. Unfortunately, the nugget protection allowance has been declining since 2009-10 and will drop even further with the 2016-2017 FAFSA. For example, the asset protection assart for a parent age 65 or older was $84,000 in 2009-10 simply falls to $29,600 in 2016-17. The allowance for younger and single parents is now even lower: $xviii,700 for a married parent age 48 and $9,400 for a single parent age 48. The decline in the asset protection allowance primarily affects middle- and loftier-income families, since the avails of depression-income families are usually sheltered by the simplified needs test.
Mark Kantrowitz is one of the nation's leading student financial aid experts. He is the author of several books virtually paying for college, including Filing the FAFSA, Twisdoms about Paying for College, and Secrets to Winning a Scholarship, and has served as publisher of the FinAid, Fastweb, and Edvisors websites.
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Source: https://money.com/fafsa-tips-how-to-shelter-savings-for-more-college-aid/
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