Does FAFSA: Cost of Attend. - Money in my bank = student loan?

[K Niner]

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I've worked for a few years so i have about 60,000 that I was going to throw in a mutual fund or something while im going to dental school.

Does anyone know if, when I fill out the FAFSA and report this money, the money or assets you currently have upon entering school affect the amount of student loans you receive?

I have seen some things that hint that I will have to use the money I already have to help pay for my education, rather than just receiving a normal full student loan.

Does anybody know anything about this? Or a book or something that might have this sort of info?

Thanks!

 

[jmt1984]

I've worked for a few years so i have about 60,000 that I was going to throw in a mutual fund or something while im going to dental school.

Does anyone know if, when I fill out the FAFSA and report this money, the money or assets you currently have upon entering school affect the amount of student loans you receive?

I have seen some things that hint that I will have to use the money I already have to help pay for my education, rather than just receiving a normal full student loan.

Does anybody know anything about this? Or a book or something that might have this sort of info?

Thanks!

Yes, money in the bank affects your FASFA. For an idea I think they have a worksheet (on the website) that you can enter in some numbers and get an idea of what you EFC (estimated family contribution is). If you are currently employed and have money saved, you will be shocked at the numbers, for I am in a similar situation as you if I get accepted.

 

[persenmi]

Wow, $60,000, that is a decent chuck of change. I would seriously consider investing that in precious metals (not ETF's or any other "paper" metal). Silver is a great buy right now. It might even fly below the radar if you convert your dollars to silver/gold coinage 😉.

 

[K Niner]

Wow, $60,000, that is a decent chuck of change. I would seriously consider investing that in precious metals (not ETF's or any other "paper" metal). Silver is a great buy right now. It might even fly below the radar if you convert your dollars to silver/gold coinage 😉.

lol yes, it might fly below the radar, however it would still technically need to be stated as an asset on the FAFSA worth the same monetary value as the 60k in cash. And if they felt like looking closer, they may wonder what I did with some random 60k that vanished from my account, and then suddenly reappeared after school or what have you.

However, I think I was finally able to puruse the internet and find the way they calculate the EFC (for the 2010-2011 at least). And according to it (since I didn't make more than $49999.99) my net worth, assets, and what not are not taken into account when determining my EFC. However around a little under half of my previous year's salary is counted towards my EFC, which is unfortunate, but whatever. (Worksheet from Pg 23-24 for Independent with no children who made less than 50k).

Anyone interested in how they calculate your EFC can look here:
http://ifap.ed.gov/efcformulaguide/attachments/062810EFCFormulaGuideUpdate1011.pdf

It's actually very short. My form, for example, was barely over one page printed, which I filled out to calculate my EFC.

 

[peanutb123]

take that doe... little by little, then throw them in a bank locker. less worries than investments...

 

[lnngu]

lol yes, it might fly below the radar, however it would still technically need to be stated as an asset on the FAFSA worth the same monetary value as the 60k in cash. And if they felt like looking closer, they may wonder what I did with some random 60k that vanished from my account, and then suddenly reappeared after school or what have you.

However, I think I was finally able to puruse the internet and find the way they calculate the EFC (for the 2010-2011 at least). And according to it (since I didn't make more than $49999.99) my net worth, assets, and what not are not taken into account when determining my EFC. However around a little under half of my previous year's salary is counted towards my EFC, which is unfortunate, but whatever. (Worksheet from Pg 23-24 for Independent with no children who made less than 50k).

Anyone interested in how they calculate your EFC can look here:
http://ifap.ed.gov/efcformulaguide/attachments/062810EFCFormulaGuideUpdate1011.pdf

It's actually very short. My form, for example, was barely over one page printed, which I filled out to calculate my EFC.

Don't quote me on this, but I think the financial aid office during one of my interviews said that 25% of your and your parents assets would be your expected contribution. That said, they also said that you could take out extra loans to cover that amount, if you chose.

 

[thanksd]

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[thanksd]

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[K Niner]

I have also considered paying my first year myself and taking out loans my second year onward. This defers interest until later (for unsubsidized loans) and also, for the 2011 year, income will be less since I will only work a few months before I quit to go to school. Thus when I apply for financial aid for the 2012-2013 year, I should have a greater chance of getting more in loans.

Anyone have thoughts on this?

It all depends on what you want to do. If you have the money and want to pay for school to avoid a higher loan and the interest from the loan instead of investing or saving it to have as cash, then that's what you should do.

It is probably the smartest move to take as little out in loans as you can while keeping some money as cash to have if you want/need it.


Although you could invest that money if you think it will beat the interest from the loans you take. You have to consider that you don't accrue interest on interest from the loan until capitalization when you graduate, but do accrue interest on interest in an investment. However you have to consider taxes and fees from the investments. And of course the biggest concern: it is an investment so nothing is guaranteed.

In my situation, im going to investment most of my money, and take a little less from the student loans in case I need that cash for something, and im gamblling that the investments I have found will beat the interest on the student loans. So its really whatever is right for you in your situation.

 

[thanksd]

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[7 Iron]

Thanks for the reply. I think you make some good points. I definitely need to think about it a bit more. I was just wondering what people have done in our situation or are thinking about doing and perhaps they thought of some ways which I may not have.

What I may end up doing is taking loans out (even unsubsidized) until the last year. If I am comfortable at that point, I may just pay for the last year myself. This leaves me in a low-risk position during school but saves some accrued interest at the end.

If you wanted to pay part of your dental school out of pocket without taking as many loans, what I would do is instead of paying year 1 in full and then taking out loans for D2-D4, I would take the Stafford subsidized loans to their max ($8500 per semester) and then pay the rest out of pocket. This way, you could have some money left over to pay for part of D2 year, and meanwhile your subsidized loans won't accrue interest until after you graduate. Or, the remaining money you save could be invested (since anything is better than 0%!)

 

[k3dental]

I haven't had the chance to fully look at the FAFSA and what info is needed, but do they attribute your spouse's income as your own for loan purposes? I am unemployed by my spouse works....however will likely not have a job right away as we have to relocate for school.

 

[K Niner]

I haven't had the chance to fully look at the FAFSA and what info is needed, but do they attribute your spouse's income as your own for loan purposes? I am unemployed by my spouse works....however will likely not have a job right away as we have to relocate for school.

Yes, they do consider it unfortunantely. Which means you will receive less than the full amount to pay for school, so be saving or be prepared for it.

 

[thanksd]

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