Vocaboly.com

[Anonymous]

Do financial aid offices treat retirement assets as available for education?

Does the retirement asset have to be in a "qualified plan"?

If two families currently have the same financial profile except that one
has a hefty retirement savings account and the other has meager retirement
savings (perhaps the families had different circumstances 10 years ago to
account for the difference) are they considered to have the same capacity to
pay?

Are there standard "best practices" that schools follow when dealing with
retirement-asset-related conditions or do they take situations on an
individual basis?

Thanks

[Steve Blank]

Assets that are in IRA's, 401k's, etc. are not reportable assets for the
FAFSA or the basic CSS/Profile. So for most colleges your example of two
identical fanilies, except for different retirement assets, would mean
that they would both have the same eligibility for aid.

However, some colleges will ask about your retirement fund values either
on the extra questions they can add to the Profile Section Q, or on
their own aid forms. Colleges that do this are usually only the most
selective and most expensive. How those funds would factor into aid
decisions is entirely up to each school, and would normally affect
eligibility only if you hade a huge retirement fund - whatever they want
to call huge.

Steven B. Blank
College Financial Aid Consultants
29 Ives Hill Court
Cheshire, CT 06410
(203)250-7761

[mjoann]

Speaking of retirement, I have a retirement income question too. I know
someone who recently retired and wants to go back to college. He made
decent money while working, but lost his savings after retirement, (long
story.) He now receives a pension that is less than half his previous
wages, and is less than the area's average income. He is supporting a
wife, adult child and grandchild. I have a feeling his income is still
too high for grants, and non repayable aid; however, with his new state
of finances, he could never afford to attend college without aid. Do
schools or the FAFSA take into account situations like this?
Unfortunately, due to his age, he cannot take on loans with the hope of
making more money after graduation. This is strictly for his own enrichment.
I wonder if there are any special programs out there for retired people
who are living on significantly reduced budgets?

mjoann

[Steve Blank]

His eligibility for aid will depend on the information he puts on a
FAFSA - annual income, number of people in the household, assets, etc.
vs. the cost of attendance, which includes tuition, fees, and allowances
for books and miscellaneous expenses. If he plans to attend he should
file the FAFSA and see what happens.

He should also check to see if any colleges in his area, particularly
community colleges, offer courses free or at reduced cost to senior
citizens. A senior citizen center may be able to advise him.

Steven B. Blank
College Financial Aid Consultants
29 Ives Hill Court
Cheshire, CT 06410
(203)250-7761