My son is receiving some financial aid from a CSS Profile school. I have a question concerning financial aid impact of a gift from grandma to myself. We own two cars and one of them is on it’s last legs. Grandparent is interested in helping buy a car for us. Question PI230A asks the following question:
“Enter the amount of cash your parents received and any money paid on their behalf (e.g., bills) in 2015. (Don’t include child support or any other amounts reported elsewhere on this application.)”
I am trying to understand under what circumstances her gift should be included as part of this question. So, here are a couple of scenarios:
Grandma writes a check to car dealer for cost of the car.
I take out loan but grandma makes car payments.
My gut is either way this is money paid by the grandparent on behalf of the parent although not really a bill. I am asking because I am not sure and if one way makes a difference, I would prefer to do it that way. This will probably be a used car, but I don’t imagine that makes a difference.
Since the question doesn’t ask for gifts, that may be better, because if the loan is in your name and someone else makes the payments, that sounds like “bills paid on behalf” to me.
But first things first. What year in school is your son?
Will any income from 2018 be reported on a financial aid form (will he be in school in year 2020/21)?
My kid is a freshman in college. So his senior year will be 2020/21. Are you guys saying for her to put her name on the car, pay for it and then gift it to me?? If so, I wouldn’t prefer that option being that she is 82 years old and the less hassle for her the better.
I understand that starting Jan 1, 2019 she can gift us money (because of prior prior), but don’t think the current car will make it (or at least don’t want to chance it). I could take out a car loan (they do have some good deals) and have her assume the payments starting Jan 1, 2019. However, money is a bit tight for me right now (I also have an older child at a state school not getting aid).
Well, kudos to you for being determined to answer this question scrupulously. I suspect that since it would seem difficult to verify/disprove a “0” answer on this line, that’s often what is put down.
In any event, if the car is going to be titled in your name, then either of your two original options fall within “cash received by parents or money paid on parents’ behalf.” Frankly, if grandma pays cash for a car in 2018 with the sole intent of gifting it to you immediately after, is that not still “money paid on parents’ behalf”? It doesn’t say “bills paid,” it says “(e.g., bills).”
I think there would be a bit more of a substantive difference if grandma makes a no-interest loan to you. In 2021 she can forgive the loan.
If grandma pays for the car in 2018, you could explain in the “special circumstances” box that this was a one-time, non-recurring gift from a family member in an emergency to replace a necessity (assuming you need the car for work commuting) and that you wouldn’t have spent that amount of money or anywhere close to it without the gift.
Thanks for the ideas. I probably won’t go the loan route. Will probably figure out how to make some car payments till the end of the year and then let grandma help.
Leased cars typically have less a monthly payment. Maybe the grands could give you the down payment…and each month, they could gift you the amount you need for the payment.
Or maybe you can afford that lesser payment yourself if you lease.
Here’s an update on what I did. After speaking to grandma, I decided to take out the special financing car loan on the purchase (0.9% financing for 5 years). Grandma will make her contribution (she never intended to buy the whole car) Jan 1 to me when it does not affect my child’s aid. She understands that I will use the money to pay for car payments and she’s ok with that.