<p>Does anyone know if there are any implications on financial aid if the grandparents make a gift? My mother wants to give me some inheritance early since I am a single parent and the father does not pay anything. My daughter is graduating this year and my son is entering. She wants to give me $20k to 25K. We do get financial aid. Is she better of to pay a bill directly to the school, like my daughter's tution for instance? Since she will not be applying for financial aid any more as she is a senior and it won't look like income to me? Thanks for your help.</p>
<p>Can she wait a year and then pay off your daughter's loans?</p>
<p>If you have $20-$25,000 hanging around in your account, it will not be "income" but it will be an asset against which financial aid can make an assessment. If your mother gives you the money after you file FAFSA in a particular year, and then you spend it before you file FAFSA for the following year, it should not have any implication. (At least I've never considered a "gift" to be income - perhaps I'm wrong about that.)</p>
<p>Would your mother consider giving you this wonderful gift in smaller yearly increments so you can do as noted above?</p>
<p>My grandparents pay my tuition directly to my school and receive a tax break.</p>
<p>I believe there is a line on the CSS Profile that asks for 'any other' money from family, etc. So if you have to fill out the Profile, you should disclose the gift.</p>
<p>If there are student loans involved, perhaps the best thing to do is to allow Grandma to just pay some of them as Chedva suggests. Since Granddaughter will be done with college soon, if the money goes directly to her, it won't matter as far as the calculations of the FAFSA for Grandson.</p>
<p>Is this money strictly intended to go towards the grandkids education? Or, could Mom stash some of it in an underfunded retirement account and thus free up more of her annual income for tuition purposes?</p>
<p>e.g. Mom normally puts 5 K a year into an IRA. This money looks like disposable income to the FAFSA process in the year it is earned. If instead, Grandma puts the 5 K into Mom's IRA, then Mom has her original 5 K available for college expenses, and there is no record of "extra" income as far as FAFSA is concerned.</p>
<p>Not sure of the tax/ gifting ramifications, however I know that a grandparent can give money directly to a university and it is not considered a gift. If a loan is paid off instead, it may be considered differently. You need to speak to an accountant/ lawyer to sort it out.</p>