Why should how much my parents are saving for retirement matter for financial aid?

It will depend on how your parents have that money saved. If it is just sitting in a savings account, then it is considered accessible income and is counted. Moving it into a 401k or another retirement account would protect it from being counted.

Since you are are still consdiered a dependent of yoour parents (especially true if they can still claim you on thier taxes) the system takes into consideration thier income and lquid assest when deciding what your family contribution should be towards the cost of education. This is certainly not a full proof way to be sure the students who have the greatest need get the funding, but it is the way it works. With over 3/4 of all college students applying for financial aide in the US, there has to be standards and guidelines to help decide who gets what. It is not always fair or accurate, but since higher education is not socialized in the US as it is in some other countries, you have to follow the rules. Be glad your college is asking you to ammend your application…they could have completely denied on the basis of fraud and that would keep you from being able to apply for the durationg of your college years. That being said, $2000 will probably not make a huge change in how much you will be entitled to.

Is the money your parents have for retirement in a designated retirement account (IRA, 401K, etc.)? If so, then the financial aid office cannot by federal law count that money towards your eligibility for federal financial aid (Pell Grant, student loans, etc.). It says so right in the FAFSA directions. However, if the money is not in a designated retirement account or if you are applying for institutional aid (like at a private college) then they can count it. Check with your aid office and your parents to make sure what’s being reported is correct.

Because if you paretns have loads of money put aside, the government feels it is the paretns responsibility to take care of their child’s education. The reasoning is that student loans that are less interest loans should be given with priority to children of families who cannot afford their child’s education. And that if parents have the means, they should pay of the school and if not, get a regular bank loan.

But, I don’t think you should be worried, a little bit of retirement savings is normal. Nothing should change unless your parents obviously have enough money to cover your studies.

it makes a difference because if your parents have a lot of money saved they would be expected to use some of it to pay for your education. with only $2000 it shouldnt change much at all.

Because financial aide are full of greedy bastards wo work for Albany. Blod thirsty. They don’t care how they get the moneyEven at the expense of your parents livlihood.