<p>1) "As of today, does the total amount of your parents' current assets exceed $54,300.00?"
Does this include our house? It must, because if I click no, I don't have to include any assets. Clarify?</p>
<p>2) My parents have around $10,000 in the bank account which is for fixing our kitchen (not an unecessary remodeling job; it's falling apart). The money will not be in the bank account by September. It may even be gone by March 1, the filing deadline for my colleges. However, I have heard over and over again that it is best to file the FAFSA as soon as possible to get the most aid. We were planning to finish it sometime this week, but the problem is we'll have to report the $10,000 sitting there. A financial aid officer I emailed told me that, while you can estimate the income, file it to get an early filing date, then fix it later, you can't do the same thing with the assets. What should we do? My mom is trying to find out ways to get rid of the 10k (i.e. paying year-long bills off early that we usually pay quarterly, etc, then use that quarterly surplus to pay for the kitchen) but I'm also worried this will look like cheating.</p>
<p>3) Tangent off of the previous question: I don't really understand the "estimate now, fix later" thing. If we estimate the current income for a filing date of January 10, then put the real income in February, which one is the one colleges see? Do they look at what we file 1/10 or the most updated version 3/1? It doesn't make sense that they'd look at the 3/1 version because of the whole "file early because they give away money early" thing. But then, what is the point of estimating then fixing later, if they never look at it? The reason I'm asking this is because, if they look at the 3/1 version, then couldn't we just include the 10k and then update the FAFSA with the new bank statement later?</p>
<p>4) I personally have about $3000 in the bank. My parents are encouraging me to buy a laptop and cell phone (which I will need for college) now before we file FAFSA. Is this okay? Will colleges see the big withdrawal before filing as an attempt to cheat the system (the whole lavish vacation thing)?</p>
<ol>
<li><p>Your parents’ primary residence (your house) is NOT listed anywhere on the FAFSA.</p></li>
<li><p>Your parents will have an asset protection that exceeds $10,000 unless they are VERY young. That being the case, it’s not worth worrying about this. Even IF it’s in the bank, assets in the parent name are only assessed at 5.6% (about) of their value. Is $560 really worth all this worry?</p></li>
<li><p>You are estimating taxes paid and income NOW because you have NOT yet completed your 2010 tax returns. You should use the best estimates possible. Once you have completed your 2010 taxes, you will need to amend the FAFSA to reflect the numbers ON those 2010 tax returns. THOSE real numbers are the ones that matter…so make your estimates good ones. Some colleges will give you an estimated financial aid award based on your estimates…but if you are way off…your FINAL award could change.</p></li>
</ol>
<p>You want to apply early because some need based awards have limited funding and are awarded on a first come/first served basis. When the money runs out, there are no more of these awards given by the school. These include Perkins Loans, SEOG, Federal Work Study and some state grants.</p>
<ol>
<li>Your money in the bank is an asset. It is assessed at 20%. So for your $3000, $600 would be counted. There is no problem with you buying things you need. BUT what would be the problem with you using this SAME money to pay for your college tuition costs?</li>
</ol>
<ol>
<li><p>FAFSA does not consider home equity…ever. Same is true for qualified retirement assets.</p></li>
<li><p>If your parent’s REPORTABLE assets, including the $10K, are under their asset protection allowance (the $54,300) then it’s a non-issue. You will not see, or report, any assets for FAFSA purposes. (Caveat: If any of the schools you’re applying to use Profile, that may be a factor.)</p></li>
<li><p>Many schools will use the initial filing date - estimated or final - to start preparing FA awards. They will not actually process any awards unles the FAFSA is final. But certain types of FA are very limited, especially for low to middle income kids, and is distributed on a “first come, first served” basis. If you are likely to be eligible for or want to be considered for SEOG, Perkins loans, federal work study, it’s often better to have an early initial filing date.</p></li>
<li><p>It is what it is…colleges are not in the business of examining receipts for money spent before the filing date and it is neither illegal nor unethical to use your savings to pay for necessary items before you file your FAFSA. It is, in fact, an often recommended strategy for minimizing the impact of assets on the EFC. Of course, most of the EFC will be derived from your parent’s income…no getting around that!</p></li>
</ol>
<p>The $54,300 amount is the exact asset protection amount for a family where the older parent is 54. If that’s the age of your older parent, lonelywayfarer, and your parents have less than that amount in savings, then that’s why the FAFSA didn’t prompt you to enter any assets when you clicked “no”.</p>
<p>I had never heard about the asset protection. That clears up a lot of things.</p>
<p>Sk8ermom, how do the assets figure into the CSS profile? Since some colleges I’m applying to do require the profile, should my mom still juggle the bank money?</p>
<p>Thumper, I am applying to several schools that meet need and so would like to keep the EFC as low, while still being honest, as possible.</p>
<p>So if I understand from both of you, the schools will make a decision based on the early filing date, then verify again with my corrected version by March 1?</p>
<p>Another question with regards to my student income:</p>
<p>I babysat throughout last summer and this school year and earned around $400. Obviously, I didn’t report it on my taxes. Must I, and how should I, include it in the section that asks for “How much did you earn from working (wages, salaries, tips, etc)”? I did not record how much I earned exactly in any way.</p>
<p>Yes, you should include money earned from babysitting. Remember that any earnings from self employment of $400 or more is subject to taxes & you should be filing a tax return if you earn $400 or more. If you didn’t earn quite $400 from babysitting & don’t need to file a return, you put the amount as income earned from work … and there is no AGI or taxes paid, because you will not file a tax return (those are tax return amounts).</p>
<p>Where I work, we have a priority filing deadline. When we award our financial aid packages in March, we do it using the date the original FAFSA was filed. So students who file by the priority deadline are going to get the best possible aid package. Other students will have filed after the priority date but before awards are packaged, but they aren’t guaranteed things like SEOG (if 0 EFC) or institutional need based grants. Those who update their FAFSA later may have their awards adjusted, but they will at least be getting grants they might not have received had they filed later.</p>
<p>I’m not Sk8rmom…but I’ll answer. There is no way of answering your question. The Profile schools use the information on that form in varying ways.</p>
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<p>I realize that…but really…your parents assets and yours are not very high. They are NOT going to have a huge impact on your family contribution and thus your need based aid. Need based aid is primarily based on the INCOME of your parents. So…what is that…because that is the single most important item schools consider when awarding need based aid.</p>
<p>lonely, it may help you and your parents to have a general understanding of how the EFC Formula works so I’m providing you a link - unless your parents have an AGI under $50K, just skip down to the worksheets and tables marked A, which start on page 9…</p>
<p>As you can see on page 10, students have an income protection allowance of $5,250 plus allowances for taxes. Assuming you made less than that amount in 2010, your $400 babysitting income is not going to add a dime to your EFC and, if you didn’t keep records and aren’t getting a statement from your employer, estimating should be fine. When/if you make above that allowance, the excess income will be added to your EFC at a rate of 50%.</p>
<p>I find it very helpful to have the detailed FAFSA instructions open in a separate tabe whenever I’m working on the FAFSA filing. This year the sidebar explanations on the FAFSA input screens are better than they were before, but these instructions are very clear and should answer most, if not all, of your filing questions:</p>
<p>As thumper said, Profile can be used in many ways…the individual schools determine that. I wouldn’t sweat a $10K asset too much though if your other assets are in the “normal” range. It is what it is…your parents have to consider what works best for their entire financial plan, not just the educational portion.</p>
<p>The Profile has a help button on almost every line requiring an explanation. You can also email the folks that work at each to get answers. They are very helpful.</p>
<p>Kelsmom, for students that file before the priority deadline at your school, is there any effective difference between students who, for example, file a FAFSA on January 2nd and those that file on January 25th?</p>
<p>I’ve talked to FA aid offices at two state universities, and both said as long as the FAFSA is received by the priority deadline, the result will be the same with other submitted by the priority deadline. Just wondering if that’s true at your school too.</p>
<p>Sometimes I think the “file early!” exhortation makes people think getting it in one minute after midnight on Jan. 1st is somehow better than doing it by the end of the month.</p>
<p>‘rent, I think that’s highly dependent on the individual school. One of my kids’ schools does use the initial filing date when distributing the limited campus-based aid. IIRC, there was about a $500 difference in grants on this year’s awards because I waited until 1/18/10 to file the estimated FAFSA…there are many kids with need at that school and it seems that they truly are in “first-come, first served” mode there for Perkins, SEOG, and work study. Although they will consider anyone who has their filing complete by the 3/1 priority deadline, it’s just less likely for returning students to be awarded certain types of funds (the same is not true for incoming freshman though). When asked, they were able to offer a Perkins loan later to make up for the reduced grant aid and I suspect this was only available because some students failed to accept their loan offer within the 2 week deadline. Unfortunately, grants are automatically accepted, so no second chances there!</p>
<p>The only difference is work study. It’s very limited & everyone wants it. When the computer does the initial packaging run, it awards work study to all students who said they were interested in work study & have EFC’s less than a certain # by filing date until it runs out. All other grants are guaranteed to those who apply by the priority deadline.</p>
<p>One really good reason to file early, though, is in the case of a rejected FAFSA. It can happen, and the date of record is for an official EFC. If the FAFSA is rejected, the EFC is unofficial … so the actual date of receipt is the date an official EFC is recorded. Earlier filing gives a student time to fix any major errors & still be on time for the priority deadline.</p>
<p>Oh, forgot about Perkins … that also gets awarded by date, so earlier is better for that, too.</p>
<p>Everyone at work asked me if I’d filed the FAFSA yet. Nope. Our EFC is too high for need based aid for S’s school (D graduates this year) … I will get it in once we file our taxes (which will be mid-February due to IRS not being ready for us yet!).</p>
<p>At all of the schools my kids applied to (all private) although there was mention of a priority filing date, NOWHERE was there any mention of a “first-come-first-served” policy for any type of aid. We’re talking a dozen-and-a-half or so total schools here. I looked through all of their websites <em>very</em> carefully. Most (but certainly not all) of these schools were on the list of schools that meet 100% of demonstrated need.</p>
<p>I was careful to meet the priority deadline, but the forms didn’t go out until the end of January.</p>
<p>I’m wondering if the “first-come-first-served” thing is mostly true at large state institutions??</p>