Will savings impact my child’s eligibility for need-based financial aid?

Colleges make varying amounts of need-based aid available; the criteria also vary. Check with the institution for its policies.

In general, colleges calculate student financial aid awards by calculating the college’s cost of attendance (COA) and then subtracting the expected family contribution (EFC). Any remaining amount may be funded with financial aid. For need-based financial aid purposes, assets considered to be owned by the parents have a relatively small negative impact. Assets considered to be owned by the child have a much greater impact.

Trust assets are often considered to be owned by the child, but this can vary. Frequently trust provisions restrict access to principal, forcing inclusion of the trust assets in the eligibility process each year that a student is in school. Non-trust assets can be spent down, limiting their financial aid impact.

For detailed information about how the calculations are performed and about the federal student aid programs, see http://studentaid.ed.gov

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