<p>I receive Social Security benefits and will continue to do so until June 2007. I'm assuming this information will go on the FAFSA. I'll be receiving approx. $1000 a month; should I expect that this money will be looked at as savings when I apply to college and thus I'll be expected to pay tuition with it? I was hoping to put most of it away and use some to pay for application fees. Anyone know the usual policy?</p>
<p>If you are indeed saving the money and banking it then the monies will be used as an asset where you will have an EFC that is 35% of your assets (not counting your parent't income and assets).</p>
<p>What if I'm saving most of the money, but using some to pay the application fees? Will that make any difference? Will the fact that I don't have a part-time job work against me and make colleges think I should pay more from the SS benefits? Thanks in advance for the help.</p>
<p>
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What if I'm saving most of the money, but using some to pay the application fees? Will that make any difference?
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</p>
<p>No. When you file the FAFSA, they will ask you your assets on that day. for example; if you have $1000 saved from your SS benefits, then your EFC will be $350. so if you are saving the full 1000 each month expect $350 /month to go toward your EFC</p>
<p>Keep in mind that some schools will require a student contribution in the form of summer earnings as part of your FA package.</p>
<p>sybbie,
Don't untaxed SS benefits also have to be declared as earnings under FAFSA? Checks usually go to the parent, so at least they are assessed at a lower rate than the student. Hope this is right as I'm getting ready to fill out my first FAFSA :)</p>
<p>Where have you been, smartie sybbie? I have missed you.</p>
<p>Social Security (SS) benefits that a parent receives for a minor child are considered income to the parent for FAFSA purposes. SS considers the parent a fiduciary for the minor child. In other words, the parent is responsible for using the SS benefits for the minor child, and not on themselves. There is a form SS uses where SS asks the parent to account for how the parent spent the money received for the minor child. SS allows a parent pretty broad discretion on how to spend the money. For example, besides the basics (food, rent, etc.,) SS benefits could be used to pay application fees, even purchase a car. A parent just has to document how they spent the money on the minor child, and what is remains of the money at the time when the child could legally oversee the money (age 18). Since SS may require a parent to document where the money went, certainly, I would pay any applications fees with the money and have the parents spend the money on the minor child so that on the day you file FAFSA, as little of the remaining money appears in the asset column of the student. Do get me wrong; Im not saying go crazy about spending the money. But application fees, new computer (if needed), etc. are okay. I would also allocate some of the money to things like food, rent, utilities (during the time the kid is a minor). Again, I would want as little of that money as possible to appear in the student asset column on the day you file.</p>
<p>Oops, I correct myself. The fourth line from the bottom of the post should read "don't get me wrong".</p>
<p>Jug, </p>
<p>I understand what you are saying and I totally agree with you because yes, the checks are made out to the parents on the behalf of the minor child and just like child support payments, the money is to be used to take care of the child and their day to day needs. </p>
<p>However, it seems from OP's comment that s/he is getting this $1000 per month or atleast looking at it from a prospective that it is "their" money to do with whatever "they" please and the parent does not have a say (which certainly is not the case). I answered the question based on the assumption that OP is simply getting the money each month and doing what they please with out the parent being the custodian. We don't know what the family dynamics are and it is not unheard of some parents to simply turn the money over to the child (just answering the question the way it was asked).</p>
<p>OP needs to provide further clarification as to what is actually happening with the funds. If parent is simply turning the check over to the child and the child is banking the $1000 per month, when it is time to file the FAFSA, any money that OP has sitting in the bank that will be considered an asset despite where it originally came from and will be assessed accordingly. I agree with Jug that it is in OPs best interest to spend down and have a few assets in his/her name as possible.</p>
<p>Hi Merlin,</p>
<p>back in school full force, juggling my fieldwork, a full time job and a class load while D is doing an study abroad program in Edinburgh.</p>
<p>Thanks for the confirmation that the SS money counts as income for the parent for FAFSA purposes.</p>
<p>When I turn 18 in November, I will become the one who receives the checks, as my parents have informed me. I'll get the benefits through June, but I don't know how much my parents have saved from when they received the checks. They're very private about their finances, including SS assets, so all I know is that I'll begin receiving a certain amount each month and I plan to put it towards college. Hope that clarifies things.</p>
<p>Sybbie:</p>
<p>I apologize. My response was only meant to be a somewhat generalized answer to the OPs original question (How do colleges factor in Social Security benefits?).</p>
<p>If the parent is turning over the 1000 to the kid, thats their business. However, the parents are still, if asked by SS, going to have to account for how they spent the money on the child and not themselves, and what remains of the money when the kid is 18. But to whom will they account? Although SS may ask the parents for an accounting, is there any follow up by SS to verify their numbers, I dont think so. Is the kid going to sue their parents, again probably not?</p>
<p>Let me amend my post #12 slightly to "when the kid is 18, of if still in high school, when the kid finishes high school." </p>
<p>As to jackson's # 11 post: the parents may if asked have to account for the money to SS for calendar year 2006, and up through graduation in June 2007.</p>
<p>Oops again: "when the kid is 18, or if still in high school, when the kid finishes high school."</p>
<p>Jugulator -
I won't have other major expenses (as far as I know) that would spend the assets down, but I definitely see your point. Is there any other way around having a full bank account when the FAFSA comes around? I'm afraid I'm a bit clueless about all of this...thanks everyone for the help.</p>
<p>Jug,</p>
<p>No problem, you just presented the "other" side of the scenario helping to give the Op a more balanced picture.</p>
<p>Jackson, </p>
<p>I think you would be in a better postition to let your parents hold on to the money because the worse case scenario; they will be assessed at a much lower rate than you.</p>
<p>Jackson:</p>
<p>I apologize for the length, but I think it may be helpful to you to first understand the big picture as to FAFSA.</p>
<p>As to FAFSA (not the PROFILE) and federal financial aid (Pell grants, Stafford loans, etc) only. First, FAFSA is a computer program. As calculated by FAFSA, an EFC is a sum of a percentage of four factors-parents income, students income, parents assets, and students assets minus the standardized deductions FAFSA allows. You file (preferably online) and based upon what you inputted, the computer program (FAFSA) spits out a number, or EFC. When determining federal financial aid, aid officers (FAO) rely on the EFC as calculated by FAFSA. There are two exceptions to the FAFSA calculation (the automatic zero EFC, and the simplified needs test). </p>
<p>Under the simplified needs test, if the parents AGI (as reported an a federal tax return) is under 50K and the parents use a short form (1040A or 1040EZ), then two of the factors (parents assets and student assets) will not be used when your EFC is calculated by FAFSA. FAFSA will automatically exclude all family assets if you meet the simplified needs test. However, this will only apply to federal financial aid. </p>
<p>Under the automatic zero, if the parents AGI (as reported an a federal tax return) is under 20K (this amount was just recently increased) and the parents use a short form (1040A or 1040EZ, or dont file), then the EFC will be automatically set to 0. Under this exception, FAFSA will ignore all other reported information if the criteria are met.</p>
<p>What does this mean to you? Assuming FAFSA spits out an EFC that indicates there is need. A FAO has to come up with a package. The package could include federal money and the schools own money. If for example, you qualify for a federal Pell grant, the FAO will not hesitate to include that federal money in your package. Why? Because it comes out of someone elses pocket (the federal govt) and not his employer, the school. When it comes to the schools own money, and somewhat dependent on how much the school wants you (you have a special skill, youre really smart, etc), the FAO will use his discretion to determine how much to add to overall package assuming the school meets your need 100%.</p>
<p>As I stated before, the money a minor child receives from SS is reported on FAFSA as income to the parent. This SS money may be considered taxable or untaxable income. As a result, this SS money could show up on FAFSA in one of two places, as part of parents AGI, or as untaxable income on FAFSA schedule B.</p>
<p>If parents AGI is under 50K and they file a short form, then all family assets will be excluded (simplified needs test). If this is the case, if any of the money is left in either your parents or your account, it wont matter. However, all the SS money received by your family will still be exposed since it will be included in your parents income either taxable or untaxable.</p>
<p>On the other hand, if your parents meet the automatic zero exception and lets say the SS benefits were listed on Schedule B, this would be the best scenario for you. As I stated before, FAFSA is programmed to ignore all other reported info if you meet this exception. Thus if you meet this exception AND the SS benefits were listed on Schedule B, FAFSA is programmed to ignore it.</p>
<p>The following link is helpful to explain FAFSA exceptions.
<a href="http://www.collegecosts.com/whatsnew.htm%5B/url%5D">http://www.collegecosts.com/whatsnew.htm</a> (click on link to past features). </p>
<p>Lets assume that you dont meet an exception. It appears that you will be applying to school 2007/2008. FAFSA will only look at tax year 2006 and the SS benefits received during 2006. Have you parents go through their records. Every penny that you or they can think of that was spent on you while you received those benefits in 2006, I would document. Did you go to a prom, buy clothes, go to a movie, buy school supplies, apply to colleges (fees), your portion of food, housing, including utilities, your portion of money for car insurance, etc. Any and all legitimate expenses. The point being is to say yes, the child received $10K in benefits, but the parent properly spent it all on your support. This does two things, it solves the problem when SS requests an accounting of how the parents spent the money, plus it arguably means there is nothing left to be considered as an asset for FAFSA purposes. And as Sybbie stated, it is much better that if any of the money remains, its not in your name. </p>
<p>Again, I apologize for the length hope it helps. Good luck.</p>
<p>
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Is there any other way around having a full bank account when the FAFSA comes around?
[/quote]
question of the day!! I think we all would like to have a good answer to that one. ;)</p>
<p>Thank you Jugulator! I think I have a better understanding of the whole process now. I was also talking to one of my teachers today - he said that having $2000 or less saved in my name for the year 2006 wouldn't be that significant and that colleges might not even look at it as an asset. He also said that I could just cash the checks and avoid opening a savings account until after the new year. I wasn't exactly sure how good the advice was, so can anyone else affirm or deny it?</p>
<p>jackson:</p>
<p>As I indicated, one portion of your EFC is derived from student assets. If on the day you file FAFSA , you report that you have saved 2K in your name, be pretty assured that colleges will treat the 2K as an asset and that you will be expected to contribute 35% of the 2K, or $700, as the portion of your EFC derived from your assets. If $700 is not significant to you, okay.</p>
<p>FAFSA looks at what you have in savings on the day you file. So if for example you open a savings acct in early 2007 and file FAFSA on Feb 1, 2007, you have to report what you have in the savings acct. In addition, any interest the savings acct generates in 2007 will be assessed at 50% when you file FAFSA in 2008.</p>