Unusual Ways to Pay for College Tactic #2 . . . Don’t Save Assets in a Student’s Name

Barry Lenson

Unusual Ways to Pay for College Tactic #2 . . . Don’t Save Assets in a Student’s Name

With this post, the StraighterLine Blog continues its series of posts that offer straightforward tactics for reducing college costs.

Today’s tactic is . . . Don’t save assets in a student’s name

If you are a student who will be filing a FAFSA or applying to colleges for financial aid, it can be a big mistake to hold a lot of money in an account that bears your own name. (It can also be a big mistake to own a ton of real estate, to establish a big charitable foundation or to be named Reginald Rockefeller III – but that’s not your exact situation, right?)

Why is it so bad to have assets in your own name? Simply because the FAFSA folks and college financial aid officers will notice your money and assume that it is all available to help you pay for college. So they’ll give their funds to somebody else who appears to have no cash. Heck, wouldn’t you too?

But there are relatively easy solutions to this problem.  One is to simply save money in an account that is established n your parents’ names. That’s a partial hedge, but there are ways to shield even more money from scrutiny. You can render any money you have virtually invisible by shuttling it into an account that is set up by an aunt, an uncle or a grandparent.

The only wrinkle with this strategy is that you have to execute it long before you are applying for aid, not immediately beforehand. (If you were a financial aid officer at a college, you’d be suspicious too if a $50,000 savings account that was in your name suddenly vanished, right?)

We’ll have another aid-boosting strategy for you in a few days. Stay tuned!

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Seven Things Every Parent Needs to Know about Paying for College

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