Let’s say that the money you got/will get from the settlement is $20,000. If you have that money when you submit your next FAFSA, that could potentially cost you $4,000 in financial aid, as others have already noted here. So are you really thinking of giving away $20,000 (and I mean, no kidding, really giving it away, not just having someone hold it for you while you’re in school) so that you don’t lose $4,000 in financial aid? Really? You’re asking about giving up $20,000 so you can have $4,000? In what reality does this make any sense?