How does IRA/401k get treated with Fin. Aid?

[bonez318ti]

I'm a post bacc student currently finishing my pre med requirements up. I worked for 3 years previously and have saved up a decent amount in my 401k and IRA (probably half of all my assets).

I quit my job back in June 2003, and started school. Hopefully I will get an acceptance for Fall 2005.

When calculating FA, do you know:

1) If my retirement assets will be counted as part of my assets (thus reducing my aid).

2) If my income (in 2003) will play a roll to deduct my aid when entering in 2005.

Thanks for any help.

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[ice_23]

As far as I know, the EFC calculated by the FAFSA cannot take your IRA/401K data into account. So no worries there.

As far as your 2003 income, typically the EFC takes into account your estimated income tax data for THAT year. So, it'll take into account your income tax data for 2005 (everything you have/made in 2004). Hence, assets you have in 2004, and income you make, WILL be reflected on your 2005 income tax, and so will be taken into account in your EFC.

By the way, EFC means expected family contribution. Because you are an independent (pursuing a graduate degree) only your data is taken into account. Once the colleges have your EFC, they will base your aid off of this quantity, and some may ask for your parental data (although some colleges have an age threshold; if you are above this age, then ONLY your contribution is taken into account --> i think it is 27 for some schools, but I could be wrong).

Hope that helped, and if anyone knows more, please correct me or add to what I have here!

-Ice

 

[mpp]

Sounds right to me...

 

[LovelyRita]

My 403b (same as 401k) didn't inhibit my ability to get loans. (haha--inhibit: can u tell I'm studying biochem?!?).

Anyway, and for my "requested" amount I wrote "maximum" and to the bank's delight I am a lendee.

M.

 

[Wednesday]

Once the colleges have your EFC, they will base your aid off of this quantity, and some may ask for your parental data (although some colleges have an age threshold; if you are above this age, then ONLY your contribution is taken into account --> i think it is 27 for some schools, but I could be wrong).

Even though the government doesn't require you to provide parental data to determine your EFC for Stafford loans, many med schools do in order to determine institutional aid. The age cuttoff at my school (if there is one) is definitely over 30. So even if you've been working and independent for years, they still want to know what your parents have. Ridiculous.

You should be fine with retirement accounts, they don't ask about them.