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Here's the financial aid gaming reason that Susan wants - retirement accounts don't count as assets on the FAFSA.

It will be interesting to see how that plays out, though.

I was out of work for 51 weeks from the end of November 2009 through November 2010. During that time, DH did not work for about 6 months as well due to rotator cuff surgery and recovery. I have twins in college and spend about $80k per year (DS gets a small amount of merit aid), and the only difference in their financial aid package for next year is that they got an extra $5k in loan money added to their financial aid package, which was already only loans.

I'm not a big proponent of playing with the numbers and trying to game the system just so my kids can have the privilege of paying a ton of interest on their school loans. I much prefer the path where we saved up in 529s and a taxable account so that we can actually pay for their college, all of which also played into the financial aid calcs although assets are counted at a much smaller percentage than income.

I wouldn't hold my breath that Susan's gyrations will result in anything other than additional loans for her kids and nothing saved for the future. At least my kids have not had to touch their Roth IRAs for college money.
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