Question about FASFA

[nasya]

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Ever since I wanted to go to Medical School it's been expensive, so part of my plan has been to save money. Now that I have some money saved does the FASFA take into account that my savings will probably only cover enough for moving across country and first month's rent? Has anyone ever heard of withdrawing money from their accounts before submitting the FASFA in order to show that you need every penny that they can give? Does it work, can you get caught up in some sort of fraud situation even though all of the money will be spent before school starts on things related to school but not covered in the student budget? Does FASFA really think that the money I have now will be available for school in the fall?

 

[mpp]

Unsubsidized Stafford loans for medical school are not need-based. You will qualify for the maximum allowed by your school (your school's annual cost of attendance that includes tuition and living expenses). Typically, everyone qualifies for $38,500 per year.

The FAFSA does take into account your savings when calculating your Expected Family Contribution (EFC), but you will qualify for unsubsidized loans regardless of your EFC. If you only have a few thousand dollars in savings this will likely not effect your EFC substantially nor your eligibility for need-based loans such as subsidized Stafford loans and Perkins loans.

There are no federal grants for medical school. Your school may use your FAFSA information to determine eligibility for school-based scholarships and grants.

 

[OSUdoc08]

Ever since I wanted to go to Medical School it's been expensive, so part of my plan has been to save money. Now that I have some money saved does the FASFA take into account that my savings will probably only cover enough for moving across country and first month's rent? Has anyone ever heard of withdrawing money from their accounts before submitting the FASFA in order to show that you need every penny that they can give? Does it work, can you get caught up in some sort of fraud situation even though all of the money will be spent before school starts on things related to school but not covered in the student budget? Does FASFA really think that the money I have now will be available for school in the fall?

Unless you have a significant amount of money it won't matter, but I always put zero dollars for the amount in the accounts even though I always have money in them. Since you plan on using up the money prior to starting school, you can put zero in there as well.

 

[katiekate]

Unless you have a significant amount of money it won't matter, but I always put zero dollars for the amount in the accounts even though I always have money in them. Since you plan on using up the money prior to starting school, you can put zero in there as well.

I put something like $200 because I'll be in the same situation. I have a little bit of money saved but it'll all be used for moving expenses. If it comes down to it, I'll just start an "under the mattress" savings account and pull all of my money out of my accounts. Even with only $200 my initial EFC is $9505 which is absolutely outrageous comsidering that's almost half of what I made last year. I'm not sure where they get their formulas for the EFC but I will definately appeal it when I complete my institution's finaid form. If anyone has any more info about reducing your EFC I would be so greatful.
Thanks.

 

[mpp]

Just realize that regardless of where the money is (bank, stocks, in your mattress) not including savings and investments on your FAFSA is fraud. The questions are specific and they are not asking what you might have in the future, but what you have right now as you complete the form. It might not be the smartest thing to start your medical career by lying just a little bit here and there just because you likely won't get caught. You can ask yourself if you would like your future patients to know that you lied on your financial aid forms.

A high EFC is due to your income which the government wrongly assumes you will still be earning. You can ammend your FAFSA later to show that you will not have that income.

If you have a lot of savings there are some legal things you can do if you feel you need to lower your EFC. You can put money into your primary residence which is not included on FAFSA. Neither are 401(k) or IRA savings and it may be smart to put $4000 into a Roth-IRA this one year that you can (when you had earned income) before you enter medical school and have no income and thus cannot contribute. You will thank yourself later when you are in a high tax bracket and will be able to access this money tax free. You may also gift someone up to $10,000 per free without any tax due (and that may have increased, I haven't checked lately).

Just wanted to be sure you realize that lying on the FAFSA is fraud and illegal.

 

[usi]

I think If you are elegible to file a 1040EZ, your assests ( such as savings on personal accounts) will be substantially sheltered.
Federal Methodology's Simplified Needs Test will ignore assets altogether when the parents' income is less than $50,000 and all family members are eligible to file an IRS Form 1040A or 1040EZ or aren't required to file an income tax return.

Any savings on a pension plan like IRA 401k etc... will be sheltered regardless what tax form you use. Don't take my word for it, check this for yourself (I could be wrong).
See for more information:

http://www.finaid.org/fafsa/maximize.phtml