I have a pending case against the insurance company of a drunk driver who hit me almost 2 years ago. The case is seeking financial reimbursement for medical bills/expenses, missed work, and permanent injury/disability. I am very concerned with how a settlement will affect my financial aid. I am not expecting much, maybe between 30-50k, which would hopefully be enough to cover medical bills and attorney fees. I do not expect to have left over money after paying these debts.
My lawyer is unsure if the settlement will be counted as income for student financial aid purposes. I am hoping not, since the money will in all likelihood go straight from the insurance company, to me, to the debts I owe from the accident.
I am 28, EFC is 1590, annual income is currently ~$15,000, beginning as a junior transfer at UCSB in the fall. If financial aid counts this money as income, my EFC will skyrocket while I will have no additional funds to pay for school with.
Does anyone have any insight into this type of situation? My lawyer suggested perhaps having the insurance company put the money into a trust I can’t access until after school, but then I will be letting all the collection bills continue to sit on my credit report for 3 more years.