FAFSA-Income Question Fall 2015 Freshmen- To buy or not to buy

Paying for College
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<p>I will be filling out my fafsa form January 1st 2015 for the Fall semester. I will be attending college as a freshmen. Will that Fafsa form be looking at the 2014 tax year?</p>

<p>For 2014 I worked a lot and received a lot (relatively of course) of income around $40,000. However I quit my job (I had to long story) to prepare for college and help take care of my family and so that income is only for 2014. I am worried that around 40,000 just sitting in the bank will look bad on the fafsa report. My father is disabled so my family has zero income (besides SS) and I need a vehicle for my commute to college next year. </p>

<p>Would it be beneficial to go ahead and purchase a vehicle here in 2014 and pay for it all up front? Will that make my income lower for 2014 and thus allow me to be more eligible for financial aid? Or does a vehicle purchase not count against income? </p>

<p>Thanks in advance for your help!!!</p>

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<p>A vehicle purchase will only lower the money you have in cash/savings/checking, not your AGI for 2014. </p>

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<p>Your income will NOT change even if you buy a car. But your assets will.</p>

<p>However, before you do all of these financial gymnastics…what college are we talking about? If the school doesn’t meet full need for all students, you might not get more aid by spending down your savings. </p>

<p>The assessment for student assets is 20%…so you would be expected to use $8000 of that money towards college costs this year.</p>

<p>Someone help me here…if this student’s parent qualify for the simplified needs test, and auto $0 EFC, would his assets even be counted? </p>

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<p>I’m applying to University of Houston main campus in Houston Tx</p>

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<p><a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid;

<p>This explains the simplified needs test. The question is…will everyone in the family be eligible to file a 1040A or 1040 EZ tax form? </p>

<p>U of Houston does not meet full need. What your $40,000 savings will do is add $8000 to your EFC. There will also be additional EFC addition due to your income. </p>

<p>There is a net price calculator on the U of Houston website. Put your family financials in there and see what happens. Try it with the $40,000 in the bank, then try it with less in the bank. See what the difference is.</p>

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<p>This I great information thanks so much I will look into it. Last year my parents filed a 1040 a and I did too. </p>

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<p>Everyone has to file a 1040A for 2014.</p>

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<p>Ok I will keep that in mind</p>

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<p>If parents qualify for the simplified needs test, student assets are not counted. </p>

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<p>So I guess that will be determined automatically once I fill out the FAFSA form? </p>

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<p>You can do the calculations yourself if you like, or at least read up on the EFC calculations a little: <a href=“http://ifap.ed.gov/efcformulaguide/attachments/091913EFCFormulaGuide1415.pdf”>http://ifap.ed.gov/efcformulaguide/attachments/091913EFCFormulaGuide1415.pdf&lt;/a&gt; (This is for the 14-15 FAFSA, but I imagine 15-16 will be similar)</p>

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<p>That’s a great document. It really clears up a lot of questions I had. Thanks kgos16 for the super helpful info!</p>

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<p>

Are you a dependent student or independent student? See <a href=“https://studentaid.ed.gov/fafsa/filling-out/dependency”>https://studentaid.ed.gov/fafsa/filling-out/dependency&lt;/a&gt;&lt;/p&gt;

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<p>I am a dependent student.</p>