<p>In the FAFSA student savings, earnings, etc, section- Do I have to report life insurance money that my grandpa left me when he was killed by a drunk driver?</p>
<p>If you have the money, you have to report that it exists. </p>
<p>If the money is in one of your bank accounts now, then yes, you have to report it as an asset. </p>
<p>You would report it if it is in your bank account (becomes your asset) before the day you file FAFSA</p>
<p>What if the money is in a CD account at the bank- meaning that the money is locked in the bank for a certain amount of time before I can use it without paying a huge fine for terminating the time too early?</p>
<p>CDs are reported as assets the same way as a regular savings account. The amount in the CD as of the day you file the FAFSA is an asset.</p>
<p>You do realize that you can withdraw your CD at any time with a small penalty. It is NOT a huge fine. I had to do it once and didn’t lose a nickel of my principal.</p>
<p>Also, even if the money is hidden in a cookie jar, it needs to be reported. The FAFSA asks for all cash and savings that you have - in a bank, in your walled, buried out in the back yard.</p>
<p>If you HAVE money, you are expected to use that money as an investment in your own education. Why should the federal government or the school give you a grant if you have the means to pay but simply choose not to pay?</p>
<p>CD with a term doesn’t matter at all. It is money you have that can be used for your education. Do you think millionaires just put all the money in a CD and go to college for free?</p>
<p>If the money is in a 529 account in your name, it is treated as a parent asset. So at least it will be assessed at a much more favorable rate than if it is a student asset. That I have learned from the forum members here. But then that money is supposed to be used for your education, I don’t know what happens if it is more than the cost of your education. So maybe this money can be put into a 529 account? Anyone know?</p>