house question

Discussion in 'Financial Aid' started by tlh908, Dec 6, 2002.

  1. tlh908

    tlh908 Senior Member
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    For FAFSA, what is considered your primary residence? For example, if I owned a house and then decided to go to school in another part of the state and rented the house out, does this count as a primary residence? I am just curious because I don't really want to sell my house to go to school. I need the rental income but I also need money from student loans......
     
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  3. paean

    paean Senior Member
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    Your primary residence (assuming that you are classified as an independant student by the federal gov't) is whatever residence you designate, which generally is the same one you claim on federal income taxes.

    If you are concerned about who is considered independant, independant students have one or more of the following characteristics:

    1. Graduate or professional student (not undergrad professional programs like nursing)

    2. Age 25 or older

    3. Married (I'm not sure if you've been married and are now divorced/widowed and wouldn't otherwise qualify).

    4. Have dependant children.

    5. Emancipated minors, or adults who were at their 18th birthday wards of the state.

    6. Armed forces veterans.

    Owning property isn't something I've really researched, so hopefully someone in your situation can give further advice, but what I've heard is that you may be ineligible for *subsidized* student loans if you have assets over a certain amount (set by the gov't) that varies depending on age, number of dependants and a few other variables. However, owning a house should not reduce the *unsubsidized* stafford loans you can borrow (30K/year limit) and may even help with getting private loans. Some students take out a second mortgage on the house they own rather than take out private loans, as there are some tax benefits and mortgages are often at better fixed rates, but then payment starts immediately rather than after graduation.
     
  4. Lorriemac

    Lorriemac Junior Member

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    I don't believe your house ownership is a problem unless you want to go to school in another state (establishing residency for state aid and instate tuition rates). If I remember correctly I was surprised that the fafsa no longer asks value of home as it did in the past. You can own a home and qualify for full pell. It will depend on how much income you come out with based on your fed taxes of course. Does anyone know how to find out about the guidelines or a chart for qualifying cutoffs and amounts? I have tried but only receive the -- it depends on many factors answer-- no kiddin? Since fafsa is government shouldn't there be access to the info in print somewhere. Someone is using a chart to determine eligiblilty, right?.
     
  5. maysqrd

    maysqrd Go A's!
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    There is actually a calculator on the Finaid.org website that I used to figure out what the fed will consider for my expected family contribution. They have all the in-and-out of financial aid on that site, including how to use money gifted from your parents, etc.

    For instance, given the household income and number of dependents, I was able find out that my EFC for next year will be about $10K. The good news is that means that I WILL have a need based award because tuition alone is going to be $28K.
     
  6. tlh908

    tlh908 Senior Member
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    Thanks for the advice offered. I still don't think I am out of trouble - I have to file a 1040 which means that FAFSA looks at my assets. According to the finaid.org website if my house is listed as an asset I have to pay 35000 a year, which I don't have without selling my house. If my house is my residence then my EFC is neglible. And of course since this is goverment work it is hard to get straight answers......
     
  7. maysqrd

    maysqrd Go A's!
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    I was told by a financial aid counselor many moons ago..... Put down what you have TODAY. Don't worry about what it will look like on paper in 8 months. If today your house is your residence, then put it down as your residence and don't worry about it until next year. Remember, you are reporting your income and assets as they are right now and for the last year. NOT for what you WILL be doing.

    Edited: Also, my friend is a CPA. She has told me that I may claim any residence as my primary residence. If I must relocate for medical school, it is a temporary residence and not my primary one, therefore, no need to sell my house.
     
  8. tlh908

    tlh908 Senior Member
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    The problem is that I did that last year and now it is time for this year. Last year I could claim my home as my residence since it was. Now I have finished a year of school and that changes everything.....
     
  9. Lorriemac

    Lorriemac Junior Member

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    Finishing a year of school should not have that kind of factor on permanent residence. For instance if you attended school out of state the permanent residence is still the home state. It is definately less complicated in the same state. From info provided it does not sound as if your home as an asset is the best avenue toward financial aid.

    Something else that you might check is if the lender on your home will let you borrow your equity and add the time on at the end (basically refinance without a 2nd mortgage to pay concurrently). Sometimes a lender will do this for a few payments if you are in a bind also. Worth the call to know now.

    Sometimes private scholarship may be tied to a location of the donar so check that with the school of choice. You might find a lucky surprise!

    The calculater is helpful but I would like to know the charts the calculater uses so I could plan accordingly for changes. To know losses and gains to income brackets. Anyone know where to locate?
     
  10. tlh908

    tlh908 Senior Member
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    Ok, After talking to several people, including my financial aid office I was finally given an 800 # to call and ask the question to the government directly. Originally I was told that I had an investment property by the phone operator and then he put me on hold and came back and said that my residence did not change. So I guess I will go with his 2nd opinion. Don't you just love our government?
     
  11. Braindoc

    Braindoc Junior Member

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    OK, sorry to drudge up this old thread.... I have a question regarding the homeownership/rental question, but was wondering how all this works if you own two homes.... One back home (perm res), and one where you are going to school. Of course the one at home is a rental, but I don't want to sell it because the income helps! When I filled out the FAFSA, it gave me a choice whether I wanted to claim assets or not, I chose not to. My question is, can I get in trouble for that and will they make me sell one to pay for school?
     
  12. sperry

    sperry snarkilicious
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    To piggyback on Braindoc's question - I also own 2 properties, although one is an investment property and one is my perm residence. I was wondering if anyone knows what effect that has on my EFC - especially given the fact that I don't list the income or the mortgage interest on my taxes. They're listed on my partner's forms. Essentially, my names on the mortgage, but I'm not directly financially involved.

    anyone have any input?? Thanks!
     
  13. paean

    paean Senior Member
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    Braindoc,

    They can't make you sell anything, although they can put you in a position where the loans you are taking out make less financial sense than selling. If you are getting income from a property, I don't see how you can choose to not claim it as an asset. It clearly is an asset. You may get in trouble with your FAO if they find out you own a property you didn't put on the FAFSA, and they most likely will adjust your aid according to the new information. Assuming, of course, that the property is listed on your taxes or some other document that they will see.

    Sperry,

    You sound unlikely to be caught if the income is reported only on someone else's taxes. However, you signed the FAFSA saying that you had no undisclosed assets, which is perjury, unless you have a legal agreement that the house is not your and you are not able to sell/mortgage it. My opinion is that hiding it (assuming you do have the ability to profit from it, regardless of whether or not you do) is not honest, and not legal. However, I doubt that you will be caught.
     

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