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Author Topic: Applying next year - what should I do with my savings?  (Read 1661 times)

Harper

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Applying next year - what should I do with my savings?
« on: May 12, 2006, 11:22:16 AM »
Here's my situation - I graduated from UG five years ago, and have been working pretty much since.  I managed to pay off my student loans, and have been pretty conscientious about saving.  So now I have a good amount in the bank, and I'm afraid it will hurt my chances at financial aid next year if I have to declare it.  So I'd like to do something about it before I get into the application cycle next year. 

Barring buying a house/condo (which is something I've considered), what do people suggest I do?  I just don't want to hurt my chances at grants, and essentially be punished for not blowing more of my money these past few years!

magnumalv

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Re: Applying next year - what should I do with my savings?
« Reply #1 on: May 12, 2006, 11:23:41 AM »
I put my in CDs (from the bank, not the music store  ;)). They're stable and have a decent interest rate.

incognito

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Re: Applying next year - what should I do with my savings?
« Reply #2 on: May 12, 2006, 11:40:01 AM »
Some schools give grants that are solely merit based, check those out first.  I believe, but doublecheck, that funds in an IRA are not considered when calculating your expected family contribution (EFC) with your FAFSA.  Also, I know some people that have purchased houses and they all consider it a good investment during law school. 
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Harper

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Re: Applying next year - what should I do with my savings?
« Reply #3 on: May 12, 2006, 11:57:13 AM »
I put my in CDs (from the bank, not the music store  ;)). They're stable and have a decent interest rate.

If the money is in a couple-year CD, do the schools not take it into consideration when calculating need-based aid? 

jacy85

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Re: Applying next year - what should I do with my savings?
« Reply #4 on: May 12, 2006, 12:01:27 PM »
Most schools do not hand out tons of need based aid.  I'm probably one of the "needier" people at Emory, and I got just under $9k.  I'm grateful, but I still took out just over $50k in loans (federal and private) this year.  You're more likely to get a merit-based scholarship.

You'll be elegible for federal loans in some form no matter how much you have in savings. The only limitation might be with the subsidized loans, but I'm not really sure, just guessing.

You'll be better off using your savings to cover costs, even if its just for your first year.  That's one year you don't have interest accruing on loans, and that's one year of "free" education.  Paying money now makes more sense than investing it and going into debt and paying interest, IMO.  At the very least, if you do take out loans instead of using the money, absolutely pay the interest while you're in school.

magnumalv

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Re: Applying next year - what should I do with my savings?
« Reply #5 on: May 12, 2006, 12:49:51 PM »
I put my in CDs (from the bank, not the music store  ;)). They're stable and have a decent interest rate.

If the money is in a couple-year CD, do the schools not take it into consideration when calculating need-based aid? 

I think it affects your EFC. You'll want to ask more knowledgeable folks to be certain tho. :)

cesco

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Re: Applying next year - what should I do with my savings?
« Reply #6 on: May 12, 2006, 01:21:45 PM »
The only way schools DONT count your money is if it is in a house.  That is pretty much the only investment they dont ask you to quantify.

It isnt as big of a deal as you might think.  I had a ridiculous EFC ($25,000 if I remember right) and still qualified for the full amount of stafford subsidized loans+ unsubsidized at all schools I was accepted at.   Plus lots of private loan $$.

You probably wont get grants, but few people do anyway. 
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claudius the ogre

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Re: Applying next year - what should I do with my savings?
« Reply #7 on: May 12, 2006, 01:23:05 PM »
LSD Pizza party on you.

SanchoPanzo

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Re: Applying next year - what should I do with my savings?
« Reply #8 on: May 12, 2006, 11:14:51 PM »
The only way schools DONT count your money is if it is in a house.  That is pretty much the only investment they dont ask you to quantify.


Not always the case. Most of the schools I applied to asked how much I paid for my house and how much it was worth. So yes, they'll get you. The only way to avoid having to disclose it and have it counter (at least at the schools I applied to) was to give my house away.
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angmill08

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Re: Applying next year - what should I do with my savings?
« Reply #9 on: May 14, 2006, 07:29:48 PM »
The only way schools DONT count your money is if it is in a house.

Not always the case. Most of the schools I applied to asked how much I paid for my house and how much it was worth. So yes, they'll get you.

But... if the OP puts his/her savings into a house, unless s/he has LOTS of money saved, chances are in one year s/he won't have enough equity to affect his/her aid package. Or, there is the IRA option -- IRAs, 401Ks and equity in your primary residence are not generally considered liquid assets, things you could easily turn into cash to use for education.

Still, all this stuff will only help lower your EFC, and as others have noted, many people with a very low EFC still get no need based aid. Some schools only offer merit aid. Unless you're applying to schools that have very generous need based aid programs, lowering your EFC probably won't help you much. I had a very low EFC -- I think it was about $3000 -- but the only "financial aid" I got was the Stafford loans, which everyone gets. The school just told me I had to take out private loans to cover what my EFC couldn't.
164/3.46 Undergrad GPA, graduated college in 1996.
Applied: UT Austin (ED), Univ. of Houston, George Washington U & American U.
Accepted: Univ. of Houston, GW, American
Attending: GW, Fall 2006