<p>Filing the FAFSA soon. In our checkbook balance is a sum of money that we took out as a loan a while back to pay for some work we are having done on the house. We took it out then because it was combined with money for a few other projects in a major remodel. Well guess what? They have never shown up to do it, so we have this money in the account. It makes it look like we have more money than we do. The money is spoken for as soon as the person does the work which was supposed to be months ago. I'm not very happy.</p>
<p>I suppose this has to be reported as an asset now, doesn't it? I don't want to pay the guy ahead of doing the work just to get rid of it, or there goes his incentive to come and actually finish it. Grrrr.</p>
<p>Yes, it has to be reported as an asset. The fact that it's earmarked for another purpose is irrelevant. (That's why we always pay the mortgage before filing the FAFSA!)</p>
<p>First check to see if you are over the protected asset limits. In the FAFSA EFC formula there is an amount of assets protection based on the number of parents and the age of the older parent. If your assets do not exceed the amount for they will not impact the EFC. As a for instance a 2 parent family with the older parent aged 50 has $55,300 in asset protection.</p>
<p>Because the Dept. of Education uses a computer program and not human review to check answers on the federal aid applicaition (FAFSA), you can answer some questions incorrectly and still have your application approved but receive a smaller aid award. </p>
<p>Other inaccuracies can cause rejection, which in the first-come, first-served world of student aid means that less aid will be available when your application is finally considered. (last year 2 million rejections - applicants must correct to have the form processed)</p>
<p>That's why many chose the services of a professional student aid advisor for help - either a non-governmental, independent one or a college aid administrator (which obviously isn't available to incoming students who haven't been selected by a college yet.)</p>
<p>Here's are my top 10 ways to get more student aid based on common mistakes we see people make:
1. Don’t delay. If you file your income taxes around the April 15th deadline, don’t wait until your taxes are completed to file your FAFSA or you will miss most of the state and college student aid deadlines. Most programs award aid on a first-come, first-serve basis. Providing accurate estimates on the FAFSA is perfectly fine. Be careful when calculating or estimating your adjusted gross income. Answering this question incorrectly won’t cause your FAFSA to be rejected, but could lower your aid award. Remember, your taxable income is not your adjusted gross income.</p>
<ol>
<li><p>Don’t include untaxed Social Security as income. The law changed this year. Reporting it will inflate your expected family contribution and lower the amount of aid for which you are eligible. </p></li>
<li><p>Children of divorced parents typically believe that the parent they live with is their legal guardian and that they are in a legal guardianship. This is not true in all cases. A wrong answer will incorrectly change the student’s dependency status to “independent” and impact the aid calculation.</p></li>
<li><p>More families are withdrawing funds from retirement accounts early – sometimes it’s taxed and sometimes it’s not. Counting these funds in both adjusted gross income and untaxed income will inflate your expected family contribution and decrease aid. </p></li>
<li><p>If you or a family member has had their job eliminated, you may be eligible to answer “yes” to the “dislocated worker” question. You need to meet one of four criteria on the day that you submit your FAFSA. Student Financial Aid Services is seeing that one in every 10 families has a member whose job has been eliminated. Being a “dislocated worker” affects how your assets are treated and could even reduce your expected family contribution to zero. </p></li>
<li><p>Consider getting student aid advice and FAFSA preparation help from paid professionals. Federal law allows paid professional FAFSA preparation, much like tax advisors help families prepare their taxes accurately and correctly to maximize their tax refunds. Choose a professional FAFSA preparer who has a good Better Business Bureau rating, uses people to review each answer to ensure accuracy, receives high ratings from past clients, and has the goal of making you eligible for the most aid possible. With the average student aid award of $9,500 at stake, help from a professional FAFSA preparer can relieve some of the stress of finding money for college. </p></li>
<li><p>Don’t include your primary residence as an asset, or you will be inflating your expected family contribution and lowering your potential for aid.</p></li>
<li><p>Not all businesses are treated the same when calculating assets. Different rules apply to family-owned businesses employing fewer than 100 people. Getting this wrong won’t reject your FAFSA, but it could lower the amount of aid for which you are eligible.</p></li>
<li><p>List your last name exactly as it appears on your Social Security card or your FAFSA will be rejected.</p></li>
<li><p>Double-check all numbers. That sounds simple, but transposing numbers is one of the most common mistakes and will affect your aid award.</p></li>
</ol>
<p>definitely do what swimcatsmom said and see whether it matters, if it does can you pay it down and use a HELOC for the repairs when the time comes?</p>