Money 'Received' and FAFSA

[huduvudu]

My wife's parents have been reading 'Die Broke' and each decided to give my wife and I just under $11000 last year - they max they can give without tax -totaling just under $44000 (yeah, I know, it's phat cash). We are going to save this money for a house, but does anybody have experience reporting this on their FAFSA (worksheet B) and how did it affect your financial aid? If it would be a negative, I can give the money back and not report it. Any thoughts?

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[SanDiegoSOD]

Looks like you need an accountant. I wouldn't take any one else's advice on a topic like this, especially through the internet.

 

[VeggieGal]

i would love to know the answer to this question as well as i am in the same situation. do u have to report it on your fafsa? i actually dont get the money until 8-10 years from now, so it really wouldn't make a difference for med schools

 

[huduvudu]

I think you are right SanDiegoSOD. I just thought I would check to see. Veggie Gal, if it is a trust fund then you need to report it under 'Net Worth' Question 44. Thanks.

 

[flash]

If you have the money, you have the money, imo.

I know that there are income allowances (something like 6000K for single person) - no expected contributions from income up to 6K/yr. And, there are also asset allowances, i.e., not expected to contribute from assets up to a certain amount.

http://www.fafsa.com/downloads/EFC/6-17-04 Federal Register with FM tables for 05-06.pdf
click this, a few pages in, read carefully - you probably want independent, married or independent, married with your own dependents depending on your situation.

Asset protection is really low - a few grand, depending on age. You would be expected to contribute (it seems to me) a majority of it.

Some things to consider - money is retirement accounts are protected. "Spend" some of it b4 Fafsa would help - spend it on something that can be "reconverted to cash", or a non-depreciating asset. E.G., you could buy gold bullion and throw it in a safe deposit box - don't have to report the purchase or sale to anyone, but TECHNICALLY would still be considered an asset for FAFSA (even though it is hard asset in a box). Pre-pay rent or other expenses (cell phones, car payments, cable, phone)? Probably get cheaper rate, but risks associated. Just thinking out loud. Hard to make 44K disappear, but prepayment could legally get a chunk out of your hands. The monthly "savings" resulting can more easily be "saved" for future uses you mentioned w/o running into problems next fafsa cylce.

Or why not buy real estate to live in now (depends on location, of course). Not ideal i guess, but maybe good idea for a couple of years until you're ready for your "real home".

Hope it helps to help you think about stuff. You probably should talk to professional - probably worth the coupls of hundred bucks for consult. Whatever you do, I would think the goal is to contribute zero now and go full loans.

 

[huduvudu]

I called FAFSA and they gave me these links to determine my "Expected Family Contribution" (EFC). This determines if you are elegible for different grants and subsidized vs. unsubsidized loans.

NOTE: If you buy a house, you do not have to report that as part of your assets (i.e. a good place to stash your cash). Once you have reported your cash/checking assets on the form, you cannot change it. Schools have access to your previous year's FAFSA

Here are the links:

http://studentaid.ed.gov/students/attachments/siteresources/EFC_Formula_Guide0405.pdf

http://studentaid.ed.gov/students/p...005/english/eligibility-criteria.htm#elegible

 

[so_nice]

My wife's parents have been reading 'Die Broke' and each decided to give my wife and I just under $11000 last year - they max they can give without tax -totaling just under $44000 (yeah, I know, it's phat cash). We are going to save this money for a house, but does anybody have experience reporting this on their FAFSA (worksheet B) and how did it affect your financial aid? If it would be a negative, I can give the money back and not report it. Any thoughts?

What about putting the money in a secured account in another name, for example, your child if applicable? Or if you trust your parents, have them put the money in another account in their names and then give you full access to it (the atm cards, checks, etc.)?

 

[Dr. Donkey]

I think the professional thing is a good idea, but who exactly (what profession) would be qualified to consult on an issue like student loans?

You probably should talk to professional - probably worth the coupls of hundred bucks for consult. Whatever you do, I would think the goal is to contribute zero now and go full loans.