<p>So my parents technically have enough money in an account to pay for all of my college expenses; it just isn't for that purpose, though. My parents are lower middle class and have never actually been able to save any kind of money for my college tuition. A year ago a wealthy relative loaned my parents money because they were interested in starting a business. The funds are all in my parents' name but it is in reality, a loan and not part of my parents' assets. I'm applying for college now though and I have to submit my fafsa. I don't intend to ask my parents to pay for college. I wanted to take out student loans and pay for it myself as an adult. I'm now worried that this will affect how much aid I will get.</p>
<p>See [What</a> is the net worth of your parents’ investments?](<a href=“http://www.fafsa.ed.gov/fotw1213/help/fotw43e.htm]What”>http://www.fafsa.ed.gov/fotw1213/help/fotw43e.htm)</p>
<p>You could claim that account is an investment account and the net worth of your parents’ current investments would be zero.</p>
<p>Do you parents signed an IOU?</p>
<p>4kidsdad, I’m not sure that is going to cut it if the funds are sitting in a bank account. In fact I am pretty sure it is not. My close friend had funds earmarked to start a business, (which he did during the year) after a payout when he left his job. He had two kids in college then on some financial aid, and both schools zinged him fully despite many phone calls, discussions, letters and full disclosure, and this is a successful businessman who has had many proposal accepted, He knows how to positon a situation. He finally, had his kids take a gap year since it involved $20K in grant money at stake, and he knew that the next couple of years were going to be truly low income while he got his business going. And so it went. One kid’s school was an ivy, and the other a top 25 university, and neither would budge.</p>
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<p>How does one claim that a bank account with funds in it has a value of zero???</p>
<p>If the money isn’t being used, give it back to the wealthy relative now - before filing FAFSA. And don’t borrow it again until your parents are actually ready to move forward with the business. And you can expect, when your parents do start that business, that it’s going to screw up your financial aid</p>
<p>bump - help! CSS is due in two days and I’m trying to get this done tonight. This problem is still not resolved. I’m caught in a frustrating situation where my parents borrowed a lot of money that they still owe back to the lender. They can’t transfer all the money back right now. I don’t even think they’re really going to do anything with it besides screw up my FA.</p>
<p>The money is sitting in a checking account. I’m caught between not reporting it and trying to find out how to explain this sticky situation on my CSS Profile. I’m not comfortable enough to lie and face the consequences of lying on your profile but I’m told that the assets aren’t reported on tax forms/W-2. How would they know if I didn’t include it? </p>
<p>On the other hand I am really leaning towards being truthful - I mean, is there really any other choice? - but this is going to stick me with a huge tuition bill that is going to end up with me being forced to turn down some great colleges just because my parents screwed up. Yes it is possible that they could loan me that huge amount of money instead of starting up the business that they wanted but it is risky. I cannot say for certain that my parents won’t leave me hanging unable to pay.</p>
<p>How do I go about reporting this on CSS?</p>
<p>Klyn257, unfortunately colleges will see you as a dependent of your parents, so, their assets will work against you. We have a rental property with equity and this keeps my kids from getting financial aid even though we don’t have cash sitting there available to pay for tuition. These forms can be audited and if large sums of cash have recently changed hands without clear reasons this could appear like a fraud situation. Your best bet is to be honest, though it may not get you the results you want this year.</p>
<p>Agree - Transfer money until after you finalize your financial aid. FAFSA and CCS Profile asks “on that day” how much is in all bank accounts. Ask for extension until 2/15 so that you can ensure this money is not included in accounts. </p>
<p>Good luck!</p>
<p>“I don’t intend to ask my parents to pay for college. I wanted to take out student loans and pay for it myself as an adult.”</p>
<p>Were your parents going to cosign those loans? And do they qualify to cosign those loans? You cannot get private loans on your own unless you are credit worthy (have a good paying job, a good credit rating, etc). You will be limited to the loans the school will give you. In general, Federal loans are limited to $5500 for freshman. It is possible they will loan an extra thousand or so in Perkins loans (that’s up to the school) but it won’t be enough to go away to school, if that’s what you’re planning. The people who take out big loans are people whose parents take out PLUS loans or who take out private loans and their parents cosign. The parents have to be credit-worthy for this.</p>
<p>When selected for FAFSA verification you and your parents will be required to supply your bank statements that will show the cash. It is an asset and must be reported. If you don’t it is fraud. </p>
<p>The penalties for providing false information on the FAFSA are severe. Per section 490(a) of the Higher Education Act of 1965 [20 USC 1097(a)], the penalties include a fine of up to $20,000 and/or up to 5 years in prison. These penalties apply both to attempts to receive and to the actual receipt of Title IV federal student aid through fraud, false statement or forgery. (The FAFSA also includes the following signing statement: “If you purposely give false or misleading information, you may be fined up to $20,000, sent to prison, or both.”) You will also be required to return all student aid, making it much more difficult for you to pay for college. Some colleges will expell students who submit falsified financial aid applications, as it is a violation of their honor code.</p>
<p>I agree with Iron Maiden. Those funds are assets regardless of the reason they are sitting in the accounts. A lot of people here have the same problem. If it’s sitting in the accounts the day you fill out the forms, they are your assets. The “just holding them for a friend” or purpose just isn’t going to cut it. I also think that if you are audited, at this point there will be some question as to what the money was doing there and why it was suddenly transferred out. ALL assets, even the cash in your socks in the drawer and under the bed are required to be reported. This particular asset is easily traceable. IF your parents move it out, they would be smart not be be moving the same thing back in showing it was just moved to avoid being reported for PROFILE purposes. Anyone holding money for any reason, or any asset, is required to report in on the forms, and it is considered fair game for ALL of us. You can explain it and ask for professional judgment, but it is an asset. This sort of game playing is exactly what the audits and verification reports look for. Precisely what they want to know. </p>
<p>With foreign students when it comes time to get the student visa when the funds have to be shown that you can be supported for the time of study, suddenly everyone wants to count that kind of money. You do realize that you will have to show account balances again when that time comes? </p>
<p>In the United States, parents are primarily responsible for undergraduate college to their financial abilities unless the student can qualify as independent. Those are the rules of the system you are going through a lot of time and trouble to request entrance. Not only that you are asking for discounts and payments to do so. Please be aware, that as a result, there will be closer scrutiny to a lot of these things because frankly, there is this disconnect ,more so from some countries than others, on how strictly to the rules one has to be in this process, and those in the system are aware of this. Some schools hire a private detective that does a check on the honesty and thoroughness of the financial representations of students from certain countries simply because too much fraud has been discovered. You misrepresent,get caught,and you won’t be coming here much less being paid to do so.</p>