by John Darer CLU ChFC MSSC RSP CLTC
Judges who reject a structured settlement for a young minor at an infant compromise hearing, in favor of sticking the proceeds in a local bank or banks to earn interest until minor is 18 when it is to be distributed in a lump sum, need to be mindful of how their decision can have an unfair potentially negative affect on student loan eligibility.
How a Student's Assets Affect Financial Aid Eligibility
Assessed at up to 20% (i.e. each $20,000 in assets held by the student will reduce financial aid eligibility by $4,000)
- CSS Profile
Assessed at up to 25% (i.e. each $20,000 in assets held by the student will reduce financial aid eligibility by $5,000)
Note that assets held in a trust that designates the child as beneficiary will be available even if the child has no ability to tap the money
Let me see now...
- Bank account earning low taxable interest
- Reduce my student loan eligibility
Where is the value proposition judge?
Read my December 7, 2016 blog College Financial Aid and Settlement Planning | FAFSA and Profile for additional useful information