I am a single mom, and my kids are on free lunch, income is less than 30k/yr. on the award letters my sr D got so far, she got the pell, IL map grant and in most cases $ from the school. we found out my Dad had saved money in a trust fund that has about 30k in it. I had not put this on the FAFSA or know where it would go. will she lose all of her aid $? 30k is only enough to pay for 1 yr if we lose all the aid but could pay all our out of pocket for 4 yrs if she still gets the aid. she has not decided on a school yet but 2 schools so far met our need completely (with fafsa loans) and others came close. I never went to college so this is all new for me. my dad says Her ss# not on the trust fund but her name is. also she saved 1k from working so she can make her car payment when she goes to school but then they took the 1k off the pell? is she not allowed to have anything in savings? thanks.
Do you have auto 0 EFC?
I believe if you have auto $0 EFC, or qualify for the simplified needs test, the assets are not listed.
When you completed your fafsa, were you asked to list assets? Or information about the student?
I don’t know what auto or needs test is. her efc went to 1000 after I put she had that much in her savings. no other assets. it asked about her job, she made about 6k last year.
Whose name is that savings in? Hers? Someone else’s?
Hoping this poster doesn’t mind me putting this here…this was posted today on another thread.
so it looks like we could have filled out the simplified FAFSA which I didn’t know about. the trust fund is in her name, my dad set it up so maybe also his. not mine. he doesn’t know how it will affect financial aid. I am wondering do I tell the school (when she picks one) I’m not trying to hide anything but don’t want to lose anything either.
When you did your fafsa, I believe you should have come to a series of questions regarding means tested benefits, and your tax form, and income. Did you answer those questions correctly?
Often families make a mistake on the type of income tax return filed. It asks “Are you eligible to file a 1040A or 1040EZ?” If you filed standard 1040 - but you were in fact eligible to file an EZ or an A based on your income, you can answer the question as “yes.” Make sure that this tax question is answered correctly on the FAFSA, as this is a common mistake.
There isn’t a simplified fafsa. The responses to fafsa questions at the beginning and your AGI input will invoke the auto 0, simplified formula or regular formula in the background depending on eligibility.
thank you, kgos16 I did file a standard 1040. so I am assuming I do not need to notify the school about the trust fund, just need to correct the FAFSA.
But were you eligible for the 1040A? Some tax software will just pick the 1040 but the filer was eligible for the 1040A. If you made under $100k, had no special schedules, etc., you might have been eligible.
It sounds like I am eligible for 1040A but filed regular 1040. I am assuming its too late to do anything? is this why she didn’t get the full Pell grant, they took 1000 off. the efc actually should be 0, but it wound up 1100. She has 1000 in saving and I have no savings. she still got about 9500 with map & pell, I just want to make sure I do it right next time! And do I tell the school about the trust fund? would like to use it for all 4 years and not all for just the first year because I made this mistake. thanks for the help!
Ask the school’s financial aid department if the trust fund is reportable. Honesty is the best policy. Avoiding fraud is important.
Student earnings and student savings are “counted” for college at a higher rate than parent savings and income, since parents presumably have household expenses, whereas the student’s earnings are supposed to go toward college. There’s a limit - I think below 6k in student income it’s “counted” at a lower rate, and above that it’s “counted” at a higher rate, but the lower rate is 30% I think (vs. 6% for parents I think). The numbers aren’t exact but the ratio should be similar. In addition, some schools that meet need make an exception when the student’s earning go toward household expenses (ie., if the parents make less than 30 or 25K a year and they work to help the family, but it has to be “proved” in some way).
I thought the student rate was 20% of the asset regardless of the amount.
Okay … the OP is not going to be eligible for Auto 0 EFC unless the income is $24,000 or less. However, because the income is low enough to qualify for simplified EFC, as long as one of these conditions is met, all parent and student assets are ignored: eligible to file a 1040A or 1040EZ or someone in household received federal means-tested benefits in past 24 months (including food stamps or free/reduced lunch) or parent qualifies as a dislocated worker.
Look at your 1040. Compare it to a 1040A. Is there anything on your 1040 that would NOT be able to go on a 1040A? If not, you are ELIGIBLE to file a 1040A, and therefore you can answer yes to this question on the FAFSA and would qualify for simplified EFC (thus, assets do NOT count). If this is the case, no need to report a trust fund in your D’s name because it wouldn’t count (you would have been able to skip all asset questions if you answered yes to being eligible to file a 1040A/1040EZ). The only exception is if your state requires asset info for its grant programs. You can log back into your FAFSA, check Yes for 1040A/1040EZ eligibility, and see if it allows you to enter the trust fund asset for your daughter. It wouldn’t count for federal aid (Pell), but if the state somehow uses that info, it might count for the state grant.