Background About the Survey

Greetings!  My name is Christy Finsel.  I am an enrolled member of the Osage Nation and I direct the Oklahoma Native Assets Coalition, Inc.  We are a Native-led nonprofit that works in Oklahoma with tribes and other Native nonprofits to increase the numbers of asset building programs in the state (such as financial education, family emergency savings account, and Children's Savings Account programs).  Today though, I am writing to you as a volunteer researcher who is working on a national Native Children's Savings Account paper to document Native-led initiatives.   As part of this paper, we are trying to learn about the financial aid implications for youth involved in Children's Savings Account programs.  The Children's Savings Account programs are being offered to help youth (generally from families with lower incomes) build a nest egg of savings, most often for post-secondary education.  Across the nation, the accounts are being held, most frequently, in savings accounts at financial institutions (banks or credit unions) or in state 529 college savings plans.  We have kindly received assistance, from the Office of Student Financial Aid at OU Health Sciences Center, and a private university in St. Louis, regarding our questions about the financial aid implications for these accounts.  Now, to gather additional information, we have created this survey.  Admittedly, in the asset building field, there is need for more research about how to design these programs to have the least impact on student financial aid.  If you have any questions about this survey, please contact Christy Finsel at 405-401-7873.  We plan to take this feedback from you, and to generally incorporate it into the paper, to help us to design programs so there is the least negative impact on student financial aid.  This research will continue to inform how ONAC provides our Children's Savings Account program. Thank you for your time. 

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* 1. Do you work at a public or private university?

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* 2. From a financial aid perspective, according to a recent policy brief published by the Center for Social Development at Washington University in St. Louis, in regard to the FAFSA and the EFC, “assets do not affect the EFC for students whose parents have AGIs below $50,000 and who meet at least one of three other qualifications: 1) anyone in the parents’ household received federal means-tested public assistance in the previous two years; 2) parents were eligible to file an IRS Form 1040A or 1040EZ; or 3) a parent is a dislocated worker. These students qualify for a simplified EFC formula (which disregards all parent and student assets) or, if parent income is $25,000 or less, the automatic zero EFC (which sets the family contribution to zero). Because of these provisions, assets have no impact on aid for the neediest students." The authors note that after additional parent-owned asset exclusions, the family still has assets that are not excluded by the EFC formula, then parent-owned assets that are counted towards the EFC are counted at a maximum assessment rate of 5.64%. 

Do you use an institutional methodology to assess the parent's assets, and if so, what rate do you use?  

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* 3. If you use an institutional methodology to assess student assets, what rate do you use? (The private university we spoke with noted they assessed student assets up to a 25% assessment rate. Thus, we wonder if other universities are assessing student assets at similar or different rates).

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* 4. We are trying to learn if funds held in a savings account at a bank, which are opened by a parent as a minor’s account for their child, are considered the student’s assets and assessed at a 20-25% rate for the EFC or if they are they considered the parent’s assets and assessed at a rate up to 5.64%.  From a communication with a financial aid counselor at a private university in St. Louis, their financial aid department considers the assets to be the child’s assets. Their reasoning is that if the bank account was closed today, for tax purposes, the funds in the account would be reported to the IRS as being the child’s assets (linked to the child’s SSN).

Thus our question for you...if savings in a Children's Savings Account are held at a bank, in a savings account with the child's Social Security Number (SSN) on the account, does your financial aid office consider the money in that account to be the student's assets?

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* 5. Some Children's Savings Account programs provide agency-owned accounts with the name of the nonprofit on the account as the account owner, for the benefit of the child. (To try to lessen any confusion, the parent and the child are not the account owner, the nonprofit is the account owner). Agency-owned accounts can be set-up as custodial bank accounts at a financial institution or as an agency-owned 529 college savings account.     

For agency-owned accounts, if the nonprofit were to send funds to your school, on behalf of the student, would your school consider the money a scholarship?

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* 6. If your school considers the money in an agency-owned Children's Savings Account to be a scholarship, would your school reduce financial aid immediately for the student that semester, or reduce the financial aid the following year, or the year after that?  

We ask as a Children's Savings Account practitioner has suggested that with agency-owned accounts, the nonprofit could wait to send the funds until the student is a junior, as it would not impact their financial aid.  We were not sure and wanted to learn more from those who provide financial aid.

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* 7. Anything else you think we should think about in terms of Children's Savings Accounts and financial aid?

Thank you for your time and feedback.  We really appreciate your assistance!

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