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Google is failing me- FAFSA ??


teachermom2834
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My ds will be attending a school (in 2018) that only uses FAFSA, not CSS.

 

He works and has a decent savings. I plan to move most of that into his 529 before filing FAFSA in October. I thought there was a student savings allowance that was exempted before they assessed student assets but my research skills are failing me. Is there such a thing?

 

I am just trying to figure out how much cash he can keep on hand and how much we should put in his 529.

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Keep in mind that it may very well not matter where the money is sitting unless the student is eligible for a Pell grant.  Most schools do not meet need so being able to demonstrate more need doesn't actually gain the student any extra funding.

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The one place I think the money would not be assessed is in a retirement account. If he does not need to access it he could open a Roth IRA and contribute up to $5500 for this year. Contributions (though not earnings) would then be available to withdraw penalty free after 5 years.

 

Makes for a decent savings strategy for kids though I don't know if it is useful for your particular situation.

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Keep in mind that it may very well not matter where the money is sitting unless the student is eligible for a Pell grant. Most schools do not meet need so being able to demonstrate more need doesn't actually gain the student any extra funding.

Yes. That is true for my student attending a public school but my private university student does get institutional financial aid based on FAFSA EFC.

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The one place I think the money would not be assessed is in a retirement account. If he does not need to access it he could open a Roth IRA and contribute up to $5500 for this year. Contributions (though not earnings) would then be available to withdraw penalty free after 5 years.

 

Makes for a decent savings strategy for kids though I don't know if it is useful for your particular situation.

Thank you. I am not trying to avoid having it counted completely but rather I want to make sure it is counted as a parental asset. We will want the money available.

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The one place I think the money would not be assessed is in a retirement account. If he does not need to access it he could open a Roth IRA and contribute up to $5500 for this year. Contributions (though not earnings) would then be available to withdraw penalty free after 5 years.

 

Makes for a decent savings strategy for kids though I don't know if it is useful for your particular situation.

 

They also have to be working and cannot put in more than they make in a year: http://www.rothira.com/blog/can-teenagers-invest-in-roth-iras.

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