Another FAFSA Question

[luckyducky87]

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If I have $4K-5K saved up in my Savings account, would that count as money that I'm expected to "contribute" towards tuition? As in, will this decrease financial aid $ that I am eligible for? I have heard of some people cashing some money, and not report this to FAFSA to keep some "emergency money." Is there a rationale to this?

I know that $4K probably isn't much in the grand scheme of how much money I'll be borrowing for medical school, but on a personal level, $4K is a big amount of money for me!! And I would definitely like to have some emergency cash to count on, just in case.

(I also anticipate having to spend $2K on something in the next couple of months, after I've filled out my FAFSA that is)

 

[wsaedalney]

If I have $4K-5K saved up in my Savings account, would that count as money that I'm expected to "contribute" towards tuition? As in, will this decrease financial aid $ that I am eligible for?

Yes.

 

[ppfizenm]

I'd say put it in a short term CD but interest rates suck so if you are really worried about reporting it on the fasfa just withdraw it.

 

[Megatron2016]

I'd say put it in a short term CD but interest rates suck so if you are really worried about reporting it on the fasfa just withdraw it.

Though for many schools you will still have to fill out other forms such as Need Access or CSS/Financial Aid profile where they will surely ask about these types of assets.

IMO $4-5k isn't enough to make a significant dent in your financial aid award, though it will have some effect. Schools only consider a fraction of your assets to be available for medical school each year (not sure what the fraction is and it probably differs by school).

There are probably effective ways of gaming the system, but you would probably need to move the asset into an account belonging to someone other than yourself or your parents. Not saying I recommend this. Honesty is the bets policy.

 

[diamethuel]

According to the FAFSA Application and Verification Guide (http://ifap.ed.gov/fsahandbook/attachments/1011AVG.pdf):

The student's net worth is calculated by adding assets reported on the
FAFSA (negative amounts are converted to zero for this calculation). The
net worth is multiplied by 20% to obtain the student's contribution from
assets, which is the portion of assets considered available to help pay for his
postsecondary education.

My interpretation of this, and someone please correct me if I'm wrong, is that 20% of the student's assets will be contributed to the expected family contribution (EFC). So 20% of your $4k will go towards your EFC.