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Custodian account mistake for financial aid
We made the mistake of providing our soon-to-graduate-high school daughter with a custodian account instead of an education savings account. This is very unfavorable to her financial aid application. The amount we had hoped would last her 4 years with corresponding f.a. package will now be half depleted in the first year. However, my thought is that with a much smaller amount left in her account, when she applies for the second year, she will be awarded a larger f.a. package. Am I right in this assumption or do colleges just offer a package based on the numbers submitted in the first year application? By her last year when she has nothing left, we envisioned her having to take out a hefty loan or drop out, but maybe this will not be the case?
Re: Custodian account mistake for financial aid
It can work either way --depends on logic used by college...
Some colleges do somewhat peg aid to first year awards .
Others annually recompute the aid based on applicable aid formula and new data .
If college follows straight FAFSA as most public sector schools do, then to drastically spend away the custodial account should have a direct math reflection on need calculations.
Note that the question as to assets is essentially a static picture at the time the form is completed , so if the assets are depleated in any lawful fashion or converted to uncounted assets or less counted assets a few days before one completes the forms then the assets are into in the picture as they might have been otherwise