Using Roth IRA to hide savings from FAFSA? Need strategy with twins starting college

thx for this breakdown! my cousin tried somethign similar last yr and got confused with the rules. ended up getting flagged for verification and had a NIGHTMARE trying to explain everything. not worth the hastle imo

Thanks for explaining - that makes sense about the contribution limits. We're within the income threshold to contribute, but you're right that moving significant amounts quickly isn't possible. Do you know if 529 accounts are counted differently than regular savings on the FAFSA? We have some money there too but wasn't sure if that was any better than regular savings accounts.

529 plans owned by parents ARE counted as parental assets on FAFSA, but at a much lower assessment rate than student assets (only about 5.64% of parent assets count toward your SAI vs 20% for student assets). So while they don't avoid FAFSA calculations entirely like retirement accounts, they're definitely better than keeping education savings in a student's name. One thing nobody's mentioned: the 2024-2025 FAFSA eliminated the "sibling discount" that used to automatically lower your SAI when multiple kids were in college. This is a HUGE issue for families with twins or kids close in age. You should definitely run the numbers through the Federal Student Aid Estimator tool to see where you stand.

Yes, that's a legitimate strategy. The FAFSA doesn't count your primary residence as an asset. Some families do choose to pay down their mortgage with savings to reduce their countable assets. However, this is essentially converting liquid assets (cash) into illiquid assets (home equity), which means you're losing access to those funds for other needs. Before making drastic financial moves, consider that only about 5.64% of parental assets are counted in the SAI calculation. So having $50,000 in savings only adds about $2,820 to your expected contribution. Sometimes maintaining financial flexibility is worth the modest increase in SAI.

that makes so much sense, thankyou!! i was scared of doing something wrong and getting in trouble

This happened to my neighbor too! FAFSA verification is no joke these days. The financial aid offices have been cracking down on what they call "strategic asset relocation" before filing. They compare bank statements and if they see large unusual transfers right before FAFSA filing, they absolutely can (and often do) question it. If anyone's having trouble getting answers from the Federal Student Aid help line about verification issues (which is SUPER common), I'd suggest trying Claimyr (claimyr.com). They got me through to a real FSA agent in under 15 minutes when I was dealing with a verification nightmare last month. They have a video demo showing how it works: https://youtu.be/TbC8dZQWYNQ - saved me days of frustration.

Wish I'd known about that service when we were going through verification hell! Spent 3 weeks trying to get someone from FSA on the phone to explain what documentation they needed.

Good point about CSS Profile! Both kids have a few private schools on their list, so we'll need to look into that too. I'll definitely mention the twin situation directly to the financial aid offices. Do you think it's better to call or email about that kind of situation?

ALWAYS CALL!!! emails get ignored or generic responses. My daughter got an extra $8500 in grants just because I called and explained our twins situation in 2022. The squeaky wheel gets the financial aid!!!

That sounds like a very solid, balanced approach. You're making smart moves within the rules without doing anything that could trigger verification issues. The twin scholarship is a fantastic find! One last tip: Once you get your SAI from FAFSA, if it seems too high based on your actual ability to pay, you can submit a Professional Judgment request (sometimes called a Special Circumstances form) to individual schools. This is especially helpful if your income in 2023 was unusually high compared to 2024, or if you have exceptional expenses not captured on FAFSA.

Thanks for the Professional Judgment tip! I'll keep that in mind once we get our SAI. Really appreciate all the help from everyone.

This is incredibly helpful coming from someone who works in financial aid! I'm definitely taking note of that October 1st filing date - I had no idea it opened that early. The point about Early Decision timing is really smart too, since we're still figuring out application strategies for both kids. Quick question about the state aid programs you mentioned - is there a good centralized resource to find these, or do I need to check with each state's education department individually? We're in Colorado if that helps with any specific suggestions. Also, thank you for emphasizing the transparency point. After reading about other families getting flagged for verification, I want to make sure we do everything above board. Better to get a slightly higher SAI than deal with verification complications!

For Colorado specifically, you'll want to check out the Colorado Department of Higher Education website - they have several programs including the Colorado Opportunity Fund and various need-based grants that might apply to your twins situation. The College Assist website (CollegeAssist.org) is also a great Colorado-specific resource that lists all available state aid programs in one place. For a broader search across states (in case your twins are considering out-of-state schools), NASSGAP (National Association of State Student Grant and Aid Programs) has a good database, though it can be a bit clunky to navigate. You're absolutely making the right call on transparency! I've seen too many families create unnecessary stress for themselves trying to "game" the system. The verification process has gotten much more thorough in recent years, and it's just not worth the risk. Your straightforward approach will serve you well.

Thanks so much for the Colorado-specific resources! I'll definitely check out CollegeAssist.org and the Department of Higher Education website. It's really helpful to have those direct links rather than trying to hunt around for state programs on my own. I'm feeling much more confident about our approach after all the advice in this thread. It's reassuring to know that being straightforward and transparent is not only the right thing to do ethically, but also the smartest strategy practically. The last thing we need is verification delays when we're already juggling applications and decisions for two kids at once! One more quick question - do you recommend having both twins list the same schools on their FAFSA, or should we be strategic about the order they list them? I've heard conflicting advice about whether schools can see where else students are applying for aid.