<p>I have a question about the FAFSA and hope someone can help me. My son is to start college 9/2011. He has a $2000 bond that we would like to acquire as the payment for the car we bought him. In doing so, his assets would diminish from about 5000 to 3000 which when doing the FAFSA, it looks like he could get a PELL GRANT of 1700. Does this make sense to do? I am mostly concerned about the income he will have in 2011 but doesnt it make sense to get the free money??? I do not want to put any red flags up for the FAFSA because ultimately we just did not get around to getting the bond cashed. Do we give him bill of sale etc. The bond has his social, name and also was bought when he was an infant, it was an education bond. Thanks</p>
<p>Makes sense to me…if the interest on the bond is his total income for 2011, he will be well withing the income protection allowance for students and it won’t be an issue for next year’s FAFSA either. Just remember that the interest will be taxable since it wasn’t used for a qualified education expense. Btw, his contribution to the EFC would only drop by $400 without the $2K bond, so he must be Pell eligible anyway.</p>
<p>Thanks. I looked at the $2000 bond. On the back it states “The interest on the bond is excluded from gross income for federal income tax purposes” . </p>
<p>Also if the bond states
John A Doe C/F for John B Doe
whom “owns” the bond as there is no social security number on it.
Thanks</p>
<p>If your son has anything else that needs to be purchased…like a laptop or dorm supplies or tires for his car or whatever, I would buy them now to reduce his savings…before filing FAFSA.</p>
<p>Student assets get assessed at a higher rate.</p>
<p>It would be a shame to have that money counted in FAFSA if the money won’t even be there in a short time.</p>
<p>Look at the front of the bond…is there not a SSN anywhere on the face?</p>
<p>Thanks moms…
and no there is NO social security on the bond anywhere and it is written as above
John A Doe c/f
John B Doe U/NH UGMA
So I am not sure if John A or John B is the owner. I thought C/f meant custodial for so does that mean John A is the custodian for John B?</p>
<p>If it’s under UGMA then it is the child’s asset.</p>
<p>The only reason why I ask the question is that the bond is listed as
Child C/F
Father U/NH UGMA
so it sounded like the child was the custodian for the father which I did not understand. </p>
<p>So we will purchase laptop for college bound son with cash (which he will need anyway) Any other purchases you think would be best with about $500 in savings that we will need to make anyway. I was thinking of just getting a Walmart gift certificate for him to hold until ready to make purchases and then that would not be an asset correct?</p>