<p>Long story short, my grandfather past away this Summer. My parents have somehow figured out a way to not get the money he has set aside for them until after taxes are filed this year. Something along those lines. All I know is that the money will not be appearing on the FAFSA for this year. That being said, my father has been unemployed this year and I think my mom has made around 60k (not sure, they don't share these things). On the CSS profile, my father reported my grandfather had set aside 20k several years ago. In his will he also left me with another 25k that will not appear on this years FAFSA. I know that this year, I qualify for a lot of financial aid. Our EFC is probably around 15k. I am worried that I will be accepted to a private college with amazing financial aid but that my financial aid could be drastically lower for fall 2014. Is there a way to figure out how much different it would be? I could list the colleges I'm applying to if need be. Don't some schools guarantee the package for all 4 years? I'm assuming they could change it if my family's financial situation changes, which it will. Any insight?</p>
<p>I’d say run the NPC for whatever school(s) you’re considering - use your current info then try it with your future asset levels. I think any school that provides substantial NEED-based aid will re-calculate need for next year and very likely drop their need package for you. Basically, if they determine you no longer need as much (or any) aid, they aren’t likely to give it. Merit aid is totally different, so it just depends on the institution and your aid/merit package.</p>
<p>You’ll likely want to move that $25k out of your name if you can before next year’s FAFSA/CSS as that amount will be considered heavily (student asset). So many factors though… run the NPC and you should get a better idea.</p>
<p>btw, changing financial situations make committing to a 4 yr. private college a hard decsison for many. Even if your family CAN afford the higher EFC in future years, do they want to pay that much for college? If not, maybe a cheaper school is in order even if you get a good 1st year package from a private you like. Tough decisions, especially with unknowns.</p>
<p>Right. Schools can guarentee that students who need the aid will receive a package for all four years, but the amount of that package will obviously change from year to year, and most schools require a new FAFSA at the very least every year, and for students to notify them with large changes in families’ financial situations.</p>
<p>rundmc123 is also completely right in that you should run the Net Price Calculators and see how the aid changes based on assets. I would also say that because of this situation, a call from you to the financial aid office would not be remiss- the counselors I have spoken to are all pretty straight-forward and nice.</p>
<p>If it’s possible to have the $25K go to your parents instead of you, that would make a big difference on the EFC impact. IIRC students get assessed at 20% on assets while parents are assessed at 5.6%.</p>
<p>Hmm I know that since my sister is a college freshman, they put her money under my name. For some reason they weren’t able to do that for next year? I think when he was alive, they told him to hold onto the money in some sort of account so that it would appear we had less. I will talk to my parents about putting that asset under their name but I’m not sure it’s possible. Are there specific college financial people that we can meet with? I know they’ve been using a financial person to sort out the will but not sure they have any experience with college financials.</p>
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<p>The IRS has limitations on gifts that can be given to another person without incurring gift taxes. The OP can’t just hand over the $25K to someone else with no tax consequences if it is legally left to him from his grandfather.</p>
<p>Once that money is gone (spent on the school next year, I assume), your EFC will go back to where it was, and your aid should go back up. Be sure the college knows it was a one time thing and that you spent the money on your college expenses.</p>
<p>I always find this discussion interesting… someone people think that an inheritance should not be counted in their income or assets, and they should continue to get the same amount of financial aid. That does not seem right to me… if you have the asset, regardless of how you came into it (heck, this is not even earned money), it should be used to pay your college bills vs. having someone else cover your bills. Need based aid comes out of the pockets of other students who pay more to the same school for their education, donors to the university, and in some cases taxpayers.</p>
<p>It does sound like your parents are already “gaming” the system by moving money between you and your sister. Again… they cannot move more than the IRS gift amount between the two of you without a tax implication, so hopefully they are not engaging you in a tax fraud situation.</p>
<p>I expect what they did this year was not take a distribution from the estate (so the money is still in estate bank accounts and legally still belongs to the estate). But they (and you) will need to take it sometime. Depending on the complexity of the estate, they (and you) might be able to wait a bit longer, maybe even put it off another year.</p>
<p>just fyi, intparent is not correct about gifting. You most certainly CAN gift $25k and a LOT more without a tax. Yes, if over the annual limit of $13k per year, per person (so $26k from son to two parents) you have to file it with the IRS but it only counts against your lifetime allowance of $5 million ! No taxes now or later unless you are very wealthy later in life.</p>
<p>Is it “gaming the system” ? I guess, sort of. However, I’d argue that the “system” has rules and if you do nothing illegal or against the rules it’s your own call. Let’s face it - colleges are waaaay overpriced at sticker price, so in a way, they are “gaming” the full-pay folks. They set their rules for what needs to be reported for financial aid, we follow the rules. I think it’s fair as long as you do what’s legal and required. IF they want to ask if you’ve gifted money, then you answer that question honestly as well. If they don’t ask on CSS then you don’t have to tell them.</p>
<p>Would it be in my best interest to spend the money he has given me at the beginning of my colleges years? I eventually want to go on to medical school and that will require a lot of money and I thought it would be useful to save some of it for that.</p>
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<p>^^ This. An inheritance is an asset. If you have the money, why should taxpayers pick up the tab for your college?</p>
<p>There can be several legit reasons for the inheritance not coming immediately. For now, let’s asume all this is at least legal.</p>
<p>The only way to know if colleges x and y will lower your aid the following year is to ask about their policies. My friend had a parallel situation (income, not an inheritance. I’ll skip the explanation right now) and the college said, no penalty to FA. The kid’s 2nd year FA was virtually identical to the first. For them, this sealed that college choice.</p>
<p>This is no guarantee for you, but shows the need to inquire. Depends on the college.</p>
<p>"^^ This. An inheritance is an asset. If you have the money, why should taxpayers pick up the tab for your college?"
Umm… I indicated private schooling. No one would be picking up the tab except the school in question. For the majority of schools I’m applying to, my family barely makes above what it costs to go to the school.</p>
<p>“There can be several legit reasons for the inheritance not coming immediately. For now, let’s asume all this is at least legal.”
It’s definitely legal that we’re not receiving the inheritance right away. There’s huge confusion as to what my uncles (dad’s brothers) will be receiving due to addiction and mental health issues. My dad has to figure it all out and what we get depends on what they do.</p>
<p>“My friend had a parallel situation (income, not an inheritance. I’ll skip the explanation right now) and the college said, no penalty to FA.”
Did they know the first year that the income would be increasing in subsequent years? Did they wait until after the acceptance and award letter? I would feel awkward about asking their specific rules on something like this. Couldn’t they even lower the first year’s package if they knew we have more money coming in?</p>
<p>For instance, Colorado College’s website states this “For students who remain in good academic standing with the college, we will renew the Colorado College grants from the four-year award automatically each year at the same level as the official offer of financial aid.” Leading me to believe they wouldn’t change it…</p>
<p>If I understand this correctly, Northeastern will not reduce your tuition over 4 years: <a href=“http://■■■■■■■.com/cczh2ou[/url]”>http://■■■■■■■.com/cczh2ou</a></p>
<p>Interesting, although I’m not applying there. I wonder how many schools follow this. Should I contact schools in April after I receive acceptances or no?</p>
<p>Pm’d you. You can call and ask an anonymous question. Keep it simple.</p>
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<p>Even private schools will bundle Pell Grants, federal work-study, and subsidized Stafford loans into their aid packages, which taxpayers do pay for. If your aid package contains any one of these (and most will), you will indeed be partially funded by the taxpayers, and if you have the money to pay instead of the taxpayers, why would they?</p>
<p>This also raises a question (for me), which is that if schools promise to keep the same level of financial aid, will they make up any differences in federal aid that may not be available?</p>
<p>Lol looks like we’ve got some tax despising republicans up in here.</p>
<p>ANYWAYS, there is no way I qualify for a pell grant, and work study/loans I would still be eligible for with this amount of change. I mean it’s not like I’ll be getting the 200k+ it needs to finance private schooling. 45k won’t even pay for one year.</p>