I am going to try and keep this post short as possible.
My parents are divorced. My mom makes very little money. I will have the biggest struggle trying to pay for college.
I am a rising senior. 17 years old who has just gotten a part time job. This is my first job, so I’m not sure where I should keep the little money that I get.
I’ve heard that opening a bank account in your own name will affect how much financial aid you get for college, which I think is stupid because i know I won’t make nearly enough to pay for college. I need some advice from you guys. What is one to do? Not work at all? Have the money deposited into my mom’s account? Take payments as checks and keep the money under my bed? What the heck?
I will try to work little during the school year, because I know I will be swarmed with school work. Right now however, I’m tired of staying at home and doing nothing. I’d also love some work experience before I head off to college because I know I’m going to have to work part time during college too.
Having a bank account will not affect your financial aid, that is misinformation plain and simple.
First if you are very low income, likely you qualify for Simplified Needs test. This means that when you file FAFSA, you mom enters her income and if it is under 50k and she files a simple tax form or you have SNAP then her asset information isn’t collected. Also your information isn’t collected. Then you qualify for full federal aid available. (Pell Grant of 5,750 and loan of 5,500. The exception is certain states require the info anyway for your aid for state schools. You still get the federal aid, though.
If you don’t qualify for Simplified Needs:
Legally you have to report your earnings and your assets which means either cash or bank. It doesn’t matter where it is.
Now if you get a work/study award from college, those earnings will not affect your financial aid, they are protected.
You can get a job now and earnings under about 6,300 will not affect your financial aid. But money on hand or in bank does. So you should give it to your mom and have her pay the school. Student assets count 20% for your EFC. Parent assets only count 5.6%. 99 out of 100 times it is better to get a job if you need money, you will be better in total combining job with aid then no job with aid.
If I tried to hide the fact I had money in the bank or substantial income, in order to get more financial aid, wouldn’t most people agree that would be…fraud?
I don’t know if you guys saw my recent post regarding my financial aid situation, but my parents are divorced and my dad is the one who claims me on his tax return. He is far from “low income” and I’m fairly certain this will affect my financial aid for college negatively.
My mom is low income but with alimony and child support factored in I don’t believe she is below 50k. Somewhere on the border.
This is still something that I’m sorting out with my counselor. I’m thinking of having my cousin co sign a loan for me if it comes down to it. Otherwise, I don’t know what to do at this point. Neither I nor my mom have good enough credit for a loan.
What has happened in the past when students sue…either the deadbeat parent for not providing the educational support they are “expected” to provide, or financial aid entities for expecting you to have nonexistent contributions?
Having the money put into your bank account doesn’t hurt anything as then amount you earn is going to be reported o on your taxes anyway (W2 will show you earned it). Having money IN your bank account when you file the FAFSA will be counted and it may lower the amount of FA you receive if you do qualify for need based financial aid. However, there are lots of things you can do to not have money in your account on the day you file FAFSA - use it to pay for college applications, testing, deposits. You could put it into a 529 savings account and it will be assessed as your mother’s asset.
It doesn’t matter, for FAFSA, if your father claims you on taxes, it only matters which parent you spend the most overnights with during the year. For CSS, your father’s income is going to be included anyway.
I’m aware that neither of my parents are legally obligated to pay for anything. I don’t plan to sue anyone anytime soon so I don’t know what point you’re trying to make. I understand the situation I’m in is terrible.
For FAFSA-only schools (most state schools), you need to show the income of the parent (and stepparent if parent is remarried) that you live with, not the one who claims you on their taxes.
“I don’t plan to sue anyone anytime soon so I don’t know what point you’re trying to make.”
Bringing a lawsuit is a common and acceptable way to address situations which may be unfair or unjust. My question had to do with the history of such lawsuits, if any.
Alright I’m a bit confused right now because these new posts are coming in as soon as I reply to someone, but let me get things straight. Please correct me if I’m wrong.
No matter what, my job is going to affect my financial aid one way or the other. However it is better to have the money in my mom's account (mom2collegekids)
On the contrary, I could open up an account in my name but spend the money paying for college applications and stuff before FAFSA is filed (twoinandone)
The above two things are regarding this thread only.
Now, as for the sticky financial situation I am in, I made a thread about this a while back that did get a bit of attention. I got banned because of my name and the thread died but I really appreciate you guys giving input on that as well. Here is what I’m getting from you guys:
Contrary to what I heard, only MOM's income will be included in FAFSA as I live with my mom.
However, for CSS DAD's income will also be factored in. (no idea what CSS is I will look that up)
I am not sure if alimony and child support is included in “income”. My mom only gets alimony for another 2 years I believe. If we were to calculate her income without alimony and child support. it would be well below 50k.
This whole thing is something I will be sorting out in the coming weeks hopefully, but I’m swamped with a lot of stuff right now. I have a new job, college apps, and school soon. My counselor told me to speak with some financial aid folks at either NOVA or GMU about this which I will be doing. I’ll get back to you guys later and hopefully you guys can give me some further input.
Thank you all for the advice and input! I hope that this can be used to help other kids that are in my situation as well.
CSS Profile is what the colleges that give good need-based aid use.
If savings are intended to be used for college, then put them into a 529 account and they will be treated the same as parental assets instead of student assets.
As people have pointed out in other threads, when you want to get financial aid you want US to pay for your college. Please tell us why WE should pay for your college rather than you and your parents? You want to hide your money under your bed so that you get more of MY money. I work as hard to earn my money as you do to earn yours. What is so special about you that I should have to use my hard-earned money to pay for your education?
Alright let’s use an example. There are about 20 weeks left this year, if you worked 20 hrs a week at minimum wage you might net about $2,000 by the end of the year.
Now assuming since your mom is low income that you will pay for some of your own expenses like going out with friends, cellphone, makeup, etc. If you spend $150 a month you might have about $1,000 left when filing FAFSA.
That will be assessed as your asset at 20% which is $200.
You could also increase your withholding of federal tax and your paycheck will be less. Then in the spring you might get a tax refund, but that should be after filing FAFSA and then you can put that and earnings towards your first college bill and what you earn in summer and fall can be paid towards second semester fees and the money will be mostly gone by the time you file FAFSA again.
Be glad if you can help out financially especially if things are tight.
Mom doesn’t have much. Most of her money goes towards rent and utilities. Even then, she needs to work to make up for some of the stuff alimony and child support won’t cover. I just got my license too so insurance is sky high.
I believe she has a 401k and maybe some money in a pension but I’m not sure how much. Those were divided up to her after the divorce. I believe you can’t withdraw money from those accounts. Not sure if they’re assets.
Would it make more sense to just give my mom the money? She could definitely use the help. Both 529 and my mom’s checking account would be counted as parental assets and thus weighted the same for FAFSA.
My mom is much more open than my father and would obviously help me out with college costs and stuff. I could give her the money now to help her out and she’ll likely do the same come college time when I need a car, supplies, food, etc. I still need a way to pay for the majority of costs from tuition and board however.
I’m moving away from the idea of keeping the money as my own as it would make it a student asset.
@BobWallace thank you for the info about the CSS. I was not previously aware that colleges gave aid on top of government aid. I assume its not much but I guess it helps a little.
EFC (estimated Family Contribution)
Loans (with subsidized interest until graduation + 6 months or unsubsidized)
Student self-help (Work-Study)
Grants (Pell Grant - Federal, State grants (?), Institutional Grants)
Gap (if financial aid does not meet full Cost of Attendance COA)
Some schools eschew loans altogether and meet full demonstrated (through CSS & FAFSA) need; others do not meet full need, even with loans.
The more competitive schools meet full need with no loans. Some scholarships, such as Gates Millennium, will pay Gap + Self-help. There are also merit scholarships of every stripe.
So, yes, colleges definitely DO give aid on top of government aid. It is called Institutional Aid.
That’s fine if you are meeting your guidance counselor but often they do not give financial aid advice. You need to learn how it works. Read the FAQ on aid located in the threads pinned to the top of the forum. Some notes
Yes, some colleges give aid and lots of it. Some give none. Often primarily based on gpa and sat, or just getting admitted to a school that will meet your full need. What are you stats?
Yes alimony and child support are income on your mother's portion of the FAFSA.
State schools often only use FAFSA, but private schools often use the CSS Profile to determine your aid. CSS often, but not always uses both parents income. You still have to file FAFSA. There are exceptions to all these rules. And some schools use their own forms.