Does having money in a savings account affect the amount of Financial Aid I receive for college?

Question

I'm 20 years old and I'm curious because I don't want to spend all the money I earn or just stash it under a mattress. I'm wondering if there are any viable options available so that I could properly invest the money I earn. I've heard that stashing money in a savings account will affect how much financial aid I receive for college. If that's so, what's the maximum amount I can have in the savings account so that it doesn't affect my financial aid?

It would be best if there was a way for me to invest the money somewhere (savings, roth IRA, etc. etc.) without having to fear that it'll greatly reduce the aid I will get.

Answer 1

All of the above answers are great!

I would like to add one thing though.  The question on the fafsa is exactly worded as,  "How much to you have in cash, savings and checking?"  So... even if you literally have it stashed under your mattress (or buried in the backyard) you STILL have to report it!

Answer 2

That answer above sure is great, except for the 5% tax.  Since neither the government or the financial institution deserve any money from you (look what the government does with it, and for a 4 year bachelor's degree, you'll be taking 2 years of worthless weed out courses and paying heavily for them).  You can buy silver bullion (coins), or Gold if you're feeling risky, Silver might fluctuate too, but not as much as Gold may (either way).  You need to buy coins though, because if you by more than so many ounces, you have to report.

In any case, you're assumption is correct, and since we arbitrarily decide who gets the aid based on lies anyway, always make it so you have ZERO money (or a trivial amount)in your savings and checking on the date you sign the application, to avoid perjury charges.

Then, once approved for aid, cash out whatever you have (or invest it in whatever you want to).

Good luck.

Answer 3

No. Savings is a GOOD thing!

Will Saving Hurt My Financial Aid Chances?

Despite what you may have heard to the contrary, saving pays, even when it comes to receiving financial aid.

The amount you'll be asked to pay for your college is based on your family's income and assets. Savings are considered an asset. However, current financial aid formulas only "tax" about five percent of your assets each year. That is, the formulas assume that five percent of your savings are available each year to help pay for college.

For Example

If a family has saved $20,000, they'll be asked to contribute about $1,000 of this savings per year to college expenses. Say their expected family contribution is $10,000. That means that while only $1,000 of their assets is being "taxed," the family can, at their option, use a greater part of their savings to meet educational expenses and reduce their need to borrow.

A family with the same income and significantly less in assets might only be expected to contribute a total of $9,000, but they'd have to rely on loans to make up the difference. The family with the greater savings is in a much better financial situation and may find they have more options in making educational choices.