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I plan to be attending law school in the next year. My wife and I have been working for just a few years. We have fully funded retirement accounts (Roth, 401, 403. My question is this... will the school demand that I empty these accounts to pay for school? Or are these funds not considered when distributing financial aid? I still have debts from undergrad and my wife is a school teacher so the financial aid will be a great help.

Alex
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I know that when I was applying for financial aid that we did not have to consider my parent's retirment funds. I was still a dependent at the time and so we had to submit their information.
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I plan to be attending law school in the next year. My wife and I have been working for just a few years. We have fully funded retirement accounts (Roth, 401, 403. My question is this... will the school demand that I empty these accounts to pay for school? Or are these funds not considered when distributing financial aid? I still have debts from undergrad and my wife is a school teacher so the financial aid will be a great help.

Alex


I don't think retirement investments are included when you fill out the FAFSA (the standard Federal form used to determine financial need). In fact, if I remember correctly, when it asks about investments, it specifically excludes those in retirement accounts. In any case, if you can get your hands on a FAFSA (or check it out at www.fafsa.ed.gov), you can confirm/refute my suspicions.
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AlexPL,

When we applied for financial aid (Stafford unsubsidized loan,) we were asked on the FAFSA the amount that was deposited in our 401k and IRA for the year. They counted the retirement money we put in for the year towards our family contribution (meaning how much they considered we could afford to pay for college expenses,) but they did not take into consideration the amount that was already there.

Your retirement balance is safe.

jmbellv

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However, if you are applying for grants/scholarships etc. at a private, not state, school they may ask for information on total amount in IRA; there has been talk in past five years at some private schools/universities about considering these as possible assets. (Just so you are warned in advance that this may occur.)
I recall unexpectedly being asked over the telephone by the financial aid officer of the private university my daughter attended a few years ago if I would consider borrowing from my IRA to increase my parental donation to her education; I was flabberghasted (sp?) and mumbled something about not being able to count on Social Security, not having a job pension or 401 or 403, not owning a house or car, and wanting to afford cheap hamburger and orange juice and bread once a week in my old age. (That question didn't come up again, thank goodness.)
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