My mother died last December. She had opened up a Parent PLUS loan because her credit was so good, so that I could afford more for myself in the future and not worry about anything.
My sister helped me fill out the FAFSA for this year, but we still put my deceased mother’s information on there anyway. My sister wanted me to not talk about our mother dying. An email later confirmed that the application had gotten word from SSA that the social security number belonged to a dead person. A few days after I got accepted, my sister told me to call financial aid about an entirely different matter, and I let them know that my mother passed away. I could not use my father’s information because I hadn’t had contact with him in years due to other familial matters, so I had to declare myself independent.
The Parent PLUS loans were canceled, but I was still able to get my aid money even though my parent had died, with my school’s financial aid department subtracting some fees due to me declaring myself independent.
All in all, was I supposed to say nothing about my mother being dead in order to get that Parent PLUS loan and all my financial aid? Will my financial aid, unless it’s verified to be independent, be cancelled and will i be forced to pay those loans back immediately?
My family is divided on the issue, and I need someone to clarify this situation clearly. Thanks and appreciations go out to those who do.
Did your mother take out the Plus loan for last year before she died? If so, they are forgiven and you won’t have to worry about them. You/she will not get additional loans off that application. They will not advance additional amounts on the Plus loan she ‘opened up.’
This year’s FAFSA would have been filed sometime from Oct-now. If you filed it after your mother died, and you cannot contact your father, the school might accept you as an independent. That would allow you to borrow the student loan at $5500 for freshmen/$6500 for sophomores, plus you can take an additional $4000 or $5000 as an independent.
Yes she did take those loans out. Would I have been able to get them if I didn’t report that she was deceased? Would there be any sort of penalties that could happen if I didn’t report her as deceased?
You already said, that you stuff was kicked out by FAFSA because they told you that the SSN belonged to a deceased person. You also said that you informed the school that your mom had passed.
NO, you cannot accept or take the money from the parentplus loans this year. Any monies disbursed before she passed will be discharged.
You would have bigger problems than financial aid, you would be committing fraud (if you take any additional monies as a parent plus loan knowing that the borrower is deceased and having no way to repay it). IF you take the money you could in serious trouble including getting kicked out of school, criminal prosecution and possibly going to jail. You would also be responsible for paying back this money
It will catch up with you because how can she sign the master promissory note (which will be needed before funds are disbursed if she is deceased?)
As an independent returning student, you will be able to borrow $6500 sophomore year, with an additional 4k as an independent student (you are already on track to have over 40k in debt which is really too much debt).
My mother died on literally the last day of the year. My question is that would FAFSA be immediately notified of her death and that the loan would automatically be cancelled?
OP- condolences on your loss. What a terrible situation to deal with at your young age. Big hugs to you.
There is a very well organized process by which a social security number is associated with the death of the person whose name it is in. There is a time lag for sure-- but it always catches up eventually. Every single bank account, insurance policy, credit card, veteran’s record, health care provider, consumer loan (for a car for example) is linked to a social security number. In the near term, you can probably write a check on your mom’s old checking account and use it at the corner grocery store. But eventually, the bank catches up (all of its systems will update so that anyone using your mom’s ATM card, writing a check, etc) and you will be flagged for fraudulent use.
Do you know if your mom had a will, and is there a lawyer helping you and your sister with the financial implications of your mom’s death?
You have some big picture financial issues to clear up- the loans are the least of it. But bottom line – there is zero upside to you NOT telling your college that your mom is deceased and a whole lot of downsides. Do not commit fraud by pretending that she is alive.
So sad for all of you. You may need a quick meeting with a lawyer if your mom didn’t have a will to find out what you and your sister need to do. There may be assets you don’t know about (life insurance from her job for example) and you and your sister are likely named as the beneficiaries of these policies. There may be a 401K from her job or an IRA.
Don’t accept any more loan money until you’ve come clean with your college and try to find out if your mom had a will. Did she have siblings? There may be an aunt or uncle who can help you figure things out.
Please tell your sister that the Social Security Administration has databases that track social security numbers. When someone dies, the SSA is notified. Neglecting to report it on your FAFSA or to the college doesn’t make you eligible for the loan. As stated above, trying to obtain a loan using a deceased person’s ID is fraud. You can be kicked out of college and face criminal prosecution. Ignorance of the law isn’t a valid legal defense. You need another plan.
How much does your school cost and how much can you pay? If you file the FAFSA you can borrow $6500 this year + an additional $4k. How much more do you need? If the school costs more than you can pay, withdraw and explore other options.
So then, what about the Pell grant, unsubsidized and subsidized loans? I was still able to get them and I was still awarded for the year. My EFC is zero, and again, I did use my mother’s information anyway. For those loans and grants, does that also count as fraud? As stated above, I did notify my school’s financial aid department and because of the situation, they’re in the middle of trying to process my override.
You will still be eligible for your pell grants and student loans (subsidized and subsidized loans)
If they deem you to be independent, you will be eligible for an additional 4K as an unsub loan. How much is your school? How much do you need to make it work?
Well, due to the situation, i would have been unable to move near campus because I would have became homeless less than a week after school. So, in order to get more cash back, I opted for online classes that although will give me more credits easily, it wouldn’t have fit my major. I’m unsure of the full amount of tuition ($5400 is the best estimation), but they did give me back over $1100.
The Parent Plus Loan…is a parent loan, not a student loan. You, the student, cannot take out this loan for,the 2017-2018 school year. Your parent would have needed to do so. The Plus for 2017-2018 wasn’t available before your mom died.
As an independent student, you do get $4000 a year more in Direct Loans. Also, if your income was low enough, did you qualify for a portion of the Pell Grant?
OP- how old are you and is this sister older or younger? Are there other siblings?
If you have not had a lawyer’s involvement in figuring out if there are assets of your mom’s you are entitled to- does your college have a law school or is there a law school in your city? They often have free legal clinics and you can make an appointment to go talk to someone about your situation. The students are supervised by both working lawyers and law professors so the quality of their advice is usually very high.
I’m just worried that your mom might have had an insurance policy through her job that you guys don’t know about, or other assets/funds that you are entitled to and if you are handling all the paperwork yourselves you won’t know about what is rightfully yours. Who filed your mom’s income taxes for 2016? If nobody filed, she might be entitled to a refund (which now will belong to you/your sister/other kids). Was there someone from her job who spoke to you about her benefits after your mom passed?
I don’t know of any wills, rebates, or any kind of reimbursement about my mother. My sister, who’s 14 years older than me, handled all of that. I have no knowledge of that kind of stuff.
Before my mother died on the last day of the year , I was covered for 2016-2017. My sister did her taxes for 2016, so would I be able to use that next year in order to get the maximum?