Do annuities affect college financial aid? The financial aid process at many schools is not always as clear cut as it may seem.
There are a number of factors that determine the amount of financial aid a student is able to obtain. It is always recommended that people complete the federal and state applications for financial aid even if they believe they may not be eligible for any aid at all. Many people are pleasantly surprised to discover that they are indeed eligible. Filing these applications with the correct financial aid information will ensure that you receive the information you need regarding your status for financial aid to attend college.
Determining Eligibility for Financial Aid
People with alternative forms of income, including annuities, are oftentimes concerned about whether or not they or their children will qualify for financial aid. They wonder if the income they receive will be included as possible funds that can be used to pay for schooling. Make sure to complete all financial forms regardless of income levels or the amount of money received from an annuity.
The Federal Application for Financial Student Aid (FAFSA) should be completed in its entirety. Any questions on the FAFSA related to sources of income should be completed honestly in order to determine if a student will qualify for financial aid. It is important that individuals file the FAFSA in a timely manner. Each state has a specific filing deadline.The process of completing the FAFSA is very easy and the forms can be completed online so that you can quickly receive a response regarding your eligibility for financial aid such as Pell Grants and student loans.
So Do Annuities Affect College Financial Aid?
An annuity provides a source of income that, in many cases, lasts throughout the person's lifetime. Other annuities can be used to access funds on an as-needed basis. In either case, this is viewed by the financial aid office as money that is available for use. As a result, in most cases, it is considered additional income that can be used to finance an education.
For those wondering do annuities affect college financial aid, in some ways they can indeed affect a person's ability to obtain some forms of financial aid. The need-based financial aid options such as Pell Grants are for those people who can prove that there is a need for financial assistance in order to attend college. People that have financial assets that can be used to pay for college, such as an annuity, will usually not be eligible for need based financial assistance.
This does not mean that having income sources such as annuities will prevent you from obtaining other forms of financial aid that are available on both the state and federal level. It is important for people to understand that there is financial aid available even for those individuals that have income sources.
Alternative Forms of Financial Aid
Even people with annuities can qualify for some financial aid as financial aid is not always need-based. There are various forms of financial aid that can be used to fund your education.
- On a federal level there are Stafford loans available to people who want to attend college. These loans are available in both subsidized and unsubsidized forms. The main difference between these loans is that the subsidized loans do not accrue interest. Individuals of all income levels can use these loans as a means to fund their education.
- Likewise, there are a number of scholarships or grants that are available on a state level. Many of these scholarships and grants are not based on a person's financial status. Many of them have other requirements, however, such as having a certain grade point average or having a certain major area of study.
It is possible for people with annuities to obtain money for college. Research the options available to you and do not assume that assets will stop you from qualifying for every form of financial aid.