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Not exempt, but essentially trivial compared to parents' assets. Just throwing out round numbers, if parents' assets are $300K including property and accounts, what is $1000 for the kid?

A student's personal financial assets are looked at at a higher percentage than the parent's assets.

So this is why financial experts usually advise against putting money directly in a child's name (unless it's so great they could easily pay for their full college bill)

If you look at the calculation for Expected Family Contribution (see Step 3), you can see that any money in a child's name (i.e. savings accounts, stock accounts, etc.) will be assessed by 20 percent. But if that same money is in a parent's name, it will only be assessed by up to 5.65 percent. That means for every $100 in the student's name, you will be expected to spend $20 to pay for college. However, for every $100 in the parent's name, you will be expected to contribute only $5.65 to pay for college. That's a big difference.
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