Asset Shifting as a Financial Aid Strategy

Is Asset Shifting a feasible financial aid strategy when it comes to your son or daughter’s college education? Although it’s not used frequently, in some situations this can be a valuable strategy.

Asset Shifting is when you move liquid assets around to increase your need-based eligibility. There are a few steps you need to take to find out if this is a good strategy for you:

1. Determine if you are eligible for aid at each school of interest. You’ll need to figure this out for each school, as every college’s Cost of Attendance (COA) is different from one another. All you need to do is subtract the Expected Family Contribution (EFC) from the COA. If the COA is higher than the EFC, then your student has need at that school and will be eligible for aid.
2. Determine your Asset Protection Allowance (APA). This is the amount of liquid assets the family can have before they have an adverse effect on the EFC. The APA is determined based on the older parent’s age and generally range from $35,000 – $60,000.
3. Shift your assets to become eligible for aid. There are several strategies to do this, including products that make assets “invisible” on the FAFSA and moving the liquid assets around. Of course, to do this effectively, it’s always best you speak with a College Funding Advisor that is fully aware of your financial situation.

Read more about Asset Shifting here or contact me for specific suggestions for your family.

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