pay the way
financial aid
TEST YOUR
FAFSA IQ
TRUE OR
FALSE:
Savings for college under my
child’s name will increase our
financial aid.
FALSE: In calculating financial aid for
a dependent student, the formula uses
20 percent of the student’s assets (after
deducting allowances). The formula only
uses 12 percent of a parent’s.
The ages of the parents
are irrelevant in calculating
financial aid.
FALSE: Under current rules, a
significant portion of a parent’s assets is
deemed “protected” from being used to
pay for college. The amount protected
is based on the age of the older parent,
with the benefit increasing with age.
Here’s an example of how that works. If a
two-parent family has $100,000 in assets
and the older parent is 55, $46,800 of the
assets will be protected. This means the
balance of $53,200 will be used for the
calculation and factored at 12 percent
(the parent’s rate).
A student’s income is so small
that it is practically irrelevant in
calculating financial aid while
a parent’s income is the big
factor.
TRUE with a CAVEAT: A student’s
income is calculated at 50 percent, while
the parent’s income is n