“Wait, what?! People negotiate college prices???” Yep. All the time. In fact, most colleges wish…
Why Families May Want To Consider Asset Repositioning Strategies To Reduce College Costs
About 20% of middle-income families will qualify for need-based aid that is higher than their merit scholarship. It often makes sense for these families to consider asset repositioning strategies to reduce their EFC so they are able to capture the additional gift aid that may be available to them.
Upper middle-income families, especially those that will have more than one child in college at the same time, can also benefit from this strategy—especially if their student is headed to an expensive, highly selective private university. Colleges using the Institutional Methodology will still be giving these families a reduction in their EFC during their overlapping years when the new FAFSA rules go into effect.
Before you make a final decision, however, there are still other reasons that must be taken into account:
- The first reason: If your student loses their merit scholarship after their freshman year, you may still qualify for a grant based on your family’s demonstrated financial need.
- The second reason: If you have a change in financial circumstances after your child is already in college, you can still appeal for additional financial aid. However, if you have not repositioned your assets, they may risk losing that opportunity.
- The third reason: If any of your children end up attending a college that uses the Institutional Methodology and your assets are not repositioned, you may lose an opportunity to get additional need-based aid.
Other reasons to reposition assets include the need to rebalance your retirement portfolio to simply not wishing to reveal your net worth to the colleges. By working with a qualified fiduciary, you can work through the pros and cons of asset repositioning which will always vary from family to family.