Dismiss Notice
SDN members see fewer ads and full resolution images. Join our non-profit community!

I'm independent, but don't want to use my CD.

Discussion in 'Financial Aid' started by INeedAdvice, May 17, 2002.

  1. INeedAdvice

    INeedAdvice Senior Member

    Joined:
    Mar 9, 2002
    Messages:
    327
    Likes Received:
    1
    I have a CD (large size), but was considering transferring the name of the CD from mine to my parents'.

    (My parents do not list me as a dependent).

    I don't want to have to be forced to use the CD money because I want to keep that as savings for the future.

    I also have a large amount in a company Investment Plan (for which I will be penalized if I withdraw money from it before the age of 55).

    Without the CD, my financial status will change to being in need of more loans. So, if the CD's are in my parents' name, is that a way of avoiding having to use the CD money??

    Also, if I don't have the CD, will I be forced to withdraw money from my company's Investment Plan (even though I'll be penalized)?
     
  2. Thread continues after this sponsor message. SDN Members do not see this ad.

  3. paean

    paean Senior Member

    Joined:
    Apr 21, 2002
    Messages:
    515
    Likes Received:
    1
    Unless you are making more interest on your CD than 8.25% (the stafford loan rate cap), it may be financially better to cash in your CD.

    Unless you are only applying for federal help (stafford loans ONLY) you will have to disclose your parents taxes and financial assets, and the schools will assume that they will help you to the greatest extent possible, regardless of how many years you have been independant, if you are married, etc. Most applicants consider themselves independant, but very few schools view any of their students that way.

    That said, the school will assume that you use all your assets over the 4 years, but only a portion of you parents assets every year, so a CD in their name will impact your financial aid less. However, a gift of more than $10,000 a year to an individual is considered taxable income. To transfer the whole amount without losing a large portion to taxes would take 3 years (to 2 parents).
     
  4. paean

    paean Senior Member

    Joined:
    Apr 21, 2002
    Messages:
    515
    Likes Received:
    1
    Another thing to consider is that even if you are able to get you finances to look like you qualify for need based aid, many schools will only offer loans anyway. You might consider putting the CD into a down payment on the house you will live in during school, that may be the best way to protect it. This will only work, of course, if you know where you are going for sure before filling out financial aid forms. Owning a house that you don't live in during med school won't help.

    This is from a non-professional who just likes to learn about money matters, I think you should consider paying a professional to go over your options with you.

    Sorry for the split post, SDN will no longer accept my longer posts. I don't know why.
     
  5. Zack90

    Zack90 Senior Member

    Joined:
    Aug 6, 2001
    Messages:
    138
    Likes Received:
    0
    </font><blockquote><font size="1" face="Verdana, Helvetica, sans-serif">quote:</font><hr /><font size="2" face="Verdana, Helvetica, sans-serif">Originally posted by INeedAdvice:
    [QB]

    I also have a large amount in a company Investment Plan (for which I will be penalized if I withdraw money from it before the age of 55).

    [QB]</font><hr /></blockquote><font size="2" face="Verdana, Helvetica, sans-serif">No. Schools don't reqire your retirement funds plans to be considered or used....
     

Share This Page