How does FAFSA work when a student meets the criteria to be classified as independent? Is it just their income that is calculated? Is a 529 still a good idea to help with college or is a Roth better if he has earned income? Are Roth withdrawals worse for financial aid then a 529 withdrawal or even an UTMA withdrawal?
Can a 529 be used for books or fees? Is a tuition waiver treated differently then a scholarship for a distribution from a 529? My 14 yo son has $2,000 in his UTMA which is his exclusively at 21, thanks to generous family and friends and doing a good job at doing his chores - he can earn $1,000/yr by being perfect with his chores. He’s opted for the $450/yr plan
Is there a case whereby being a dependent on the FAFSA can be advantageous or leave you with a lower bill or EFC, such as schools with large endowments, or will being independent always leave you with a lower EFC and consequently more grants and scholarships?
I am fortunate that he is independent status as we only had four years to save for his college. We do get a stipend so it might help to use that to fund a 529 or help him fund a RothIRA when he works
Your post is confusing. You said you have a 14 year old but then you said he’s independent status which isn’t possible. Are you talking about two different kids?
You can’t be declared independent unless you are age 24, married or had some form of military service. Otherwise everyone would do this.
No. One child. Thanks for your post. He will be an independent for a reason not mentioned that has nothing to do with military service, marriage, or age. We will likely help him with college or transportation
So I’m wondering if that changes how we plan for college and what tools we can use to minimize impacts on financial aid that might be different then if he was considered to be our dependent. Should we set aside $$$ for student loans or help him with a down payment or move out fund instead? Money is fungible
How can being an independent help and how can it hurt? Are his assets and income counted more, the same, or less than if he were a dependent?
Are you penalized more for income or assets of your own even though your parents assets and income are not considered on the FASFA? A school may also request parent income and assets. Are 529s handled differently? How do Roth withdrawals effect aid?