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ed1007: "My son will be entering the 11th grade in the fall. While we have been doing some saving for his college the latest look at the accounts reveals that they will not be sufficient to cover expenses for the schools he is looking to attend. We have separate general savings, ~$50,000 and I am mulling over two options.

Option 1. Earmark the general savings we have, non-retirement, for his college to fill some of the gap. My concern here is that my guess is that such a large savings balance outside a 529, or retirement would be considered available for college expenses when need is calculated. Decreasing or eliminating aid until it is "used up."

Option 2. Use this savings to pay a large chunk on my mortgage. I think equity in the primary residence does not decrease the need calculation. My concern is that if the aid we receive is insufficient to cover the expenses we will need to draw on the equity requiring taking out a mortgage at higher rates than we have now.

Does anyone know of an online tool that can help me explore the effect on need calculations between the two options?

First, I suggest that you determine whether the schools your son is interested in rely only on the FAFSA or also require the CSS profile, too.

FROM MY POST No. 8514 ON THIS BOARD -

"FAFSA - Free Application for Federal Student Aid

Some schools, mainly private schools, also require completion of College Scholarship Service Profile (CSS Profile) - see https://cssprofile.collegeboard.org/
It is my understanding (though I have never completed one) that it asks for far more information than a FAFSA, including, IIRC, value of 401k and IRA accounts and equity in your home.

The following colleges, universities, and scholarship programs use CSS Profile® and/or IDOC as part of their financial aid process -

https://profile.collegeboard.org/profile/ppi/participatingIn...


I am not familiar with the details of the CSS but if I understand correctly, it digs much deeper than the FAFSA and may make your question moot.

Second, I also remind you than financial aid also sometimes comes in the form of student loans and/or work study; the former need to be repaid and the latter occupies up to (IIRC) 20 hours per week.

Third, you should be having discussions with your son and he should plan on applying for any scholarships for which he reasonably qualifies.

Fourth Google is your friend. You can complete an unofficial FAFSA and get a reasonable estimate of your EFC (Expected Family Contribution). Or google estimating EFC. I do not have any of the sites saved from when I was in your position.

Good luck.

Regards, JAFO
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