Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Our son will be a Senior in high school this year so 2001 is the year that counts with FAFSA for his Freshman year in college. I currently have a UGMA account containing his college funds which will become his when he turns 18 in November. Since FAFSA uses a much higher percentage of the student's assets when computing EFC, is there anything illegal about him gifting money to his parents and/or grandparents in December to reduce his year-end assets? The gifts would not exceed $10,000 per person so as not to bring gift tax into play.

Also, my understanding is that, after the asset protection allowance, 12% of the parents liquid assets go into EFC vs. 35% for the student. Are these the correct percentages? Somewhere I think I saw 5% of the parents assets was used but I assumed it was a mistake. Now, I'm getting close enough that the real numbers matter.
Print the post  

Announcements

Paying For School Guide
Trying to Tackle Tuition? The Motley Fool's Guide to Paying for School will help you fight those rising education costs.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.