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Positioning Your Income and Assets to Enhance Financial Aid Eligibility

| February 01, 2017
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Financial Aid for College

Positioning Your Income and Assets to Enhance Financial Aid EligibilityThere are a number of strategies you can implement to try to enhance the amount of federal financial aid your child receives. These strategies take advantage of the federal rules about which family income and assets are counted in determining your family's expected family contribution (EFC).

Note: Starting with the 2017/2018 school year, the base year will be two years behind.

Strategies to reduce income

  • Time the receipt of discretionary income to avoid the base year
  • Pay all federal and state income taxes due during the base year, which will reduce assessable cash and increase your tax deduction on the FAFSA
  • Have your child limit his or her income for the base year to the amount of the student income protection allowance

Strategies to reduce assets

  • Use cash (an assessable asset) to pay down consumer debt, which is not counted in the federal methodology
  • Use cash to make large planned purchases the year before your child starts college
  • Use counted assets to pay down your mortgage, which increases your home equity (an excludable asset)
  • Shift counted assets above your asset protection allowance (a sum automatically excluded from consideration) to assets excluded by the federal methodology (e.g., home equity, retirement plans, cash value life insurance, annuities)
  • Use your child's assets to pay for the first year of college, which reduces (for subsequent years) the student asset contribution factored into your EFC

Capital Asset Management is a marketing name. Securities and investment advisory services offered through FSC Securities Corporation, member FINRA / SIPC and a registered investment advisor. 3636 N Roff Avenue, Oklahoma City, OK 73112

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.




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