<p>Was just curious if our (the parents) helping our kid pay off unsubsidized loans will be detrimental to her getting financial aid in the future?</p>
<p>Our D went back to school this year (2009-10) as a full time student. She ended up not getting any grants but only loans in the way of financial aid- some subsidized and some not. We are wanting to pay off the loans that are accruing interest during her time in school. However, she still has a few years to go. For the 2010-11 school year, she did manage to be awarded some Pell Grant money due to her lacking income. (She waitresses and goes to school full time.) We'd like to see her take the subsidized loans again while we "gift" her the unsubsidized loan portion of her academic expenses. While we have an accountant, I was just curious how our helping her out with expenses might then affect her ability to get financial aid for 2011-2012 school year. Is it considered income for her? Anyone know how to help an independent kid without it affecting her independence when it comes to getting financial aid?</p>
<p>PS… she is currently 25.</p>
<p>She is supposed to declare on FAFSA any other income or payments received.</p>
<p>Here’s an idea - pay the interest for her while she is in school setting aside the principle for the loan in a separate account. When she graduates - gift her the prinicple and pay the loans off for her then.</p>
<p>I don’t think she’d have to wait till her D graduates. I think she can do that during her final year since she won’t have a FAFSA to do for the following year. </p>
<p>Just wondering…at what point would “gift money” need to be reported? If you give your child $200 for a Christmas present, do they have to report that on FAFSA? If not, at what amount would they have to declare it?</p>
<p>
</p>
<p>This is essentially what we’re thinking with regards to the subsidized loans. We’ll help her pay them off when she graduates. The ideal behind paying off unsubsidized loans is to eliminate accruing debt.</p>
<p>mom2ck - I actually thought of that after I posted. She could do that in the spring of junior year, I guess.</p>
<p>The question on FAFSA is fuzzy. I don’t think it’s necessary to include normal birthday and Christmas presents - basically, they want to know if anyone is paying your bills or gifting you money that would skew your <em>need</em>, I guess.
A 25 year old might have a $0 EFC based on her income and bank account but if the Bank of Grandma is giving her $10,000 a year, obviously she doesn’t have a $0 EFC.
Likewise - if Mom and Dad are giving her a couple grand to pay her loans - that might look fuzzy.</p>