Are UGMA and UTMA Accounts Reported as Investments on the FAFSA?
May 28, 2012
Tuesday, May 29 is National College Savings Day (i.e., May 29 is 5/29, a cute reference to 529 college savings plans). To commemorate the occasion, Mark Kantrowitz answers a question about saving for college.
After submitting our FAFSA for my son, we got back an EFC of 23207 on the SAR. I have been told by admissions that that is extremely high. The FAFSA says I have to include child support payments we received for him last year, even though the payments will end this year before the start of his freshman year. The amount was approximately $6,000. Also the FAFSA says I have to include UTMA accounts in net worth of investments. My son has a $30,000 UTMA account that he is listed as secondary on and his grandfather is primary. My son does claim the dividends on his personal tax return, but we haven’t decided if we will use any of that money toward college expenses. I contacted the school and they tell me I can submit a change of income form through the school for the child support issue and that I don’t need to include the UTMA information at all on my FAFSA because my son is not primary on the account. The FAFSA form instructions say quite the opposite. Can I make the necessary correction on the FAFSA that they (admissions) say? I am trying to not get myself in trouble. What should I do? — Dave B.
College admissions staff do not necessarily have the expertise to answer questions about financial aid. Address questions about financial aid to a college financial aid administrator, not a college admissions officer.
College admissions staff also do not have the authority to make adjustments to data elements on the Free Application for Federal Studnet Aid (FAFSA). Congress specifically delegated the authority to make adjustments only to the college’s financial aid administrators.
Some colleges have set up one-stop shops that combine the customer service operations of admissions, financial aid, bursar and registrar. These streamlined hub operations can be convenient, saving the student from having to run around campus to visit multiple offices. They can answer simple questions about financial aid and hand out forms. But they don’t always have the depth of expertise to answer technical questions about financial aid. Unfortunately, it isn’t always possible to tell whether the answer to a question requires technical expertise. But if an answer conflicts with information available from other credible sources, such as the FAFSA instructions, and the front office staff are unable to resolve the conflict, ask to speak to a financial aid administrator.
Tip: When asking a question about financial aid, write down the name and/or ID number of the person answering the question. This will allow supervisors to provide additional training to staff who answer quesions incorrectly.