<p>Hello all,
On the FAFSA, there are instructions indicating that the parent that you lived with more than half the time is the one that you report on. In my situation, my daughter lives with me and step-mom and because of our income, my household's EFC is going to be about 38K and I don't even see any point in filing the FAFSA for her freshman year: there will be no aid, why even document this? On the other hand, we calculate that my daughters mother will have a EFC of 2K if she is considered the parent. Over the 12 months after daughter graduates HS, she is going to move in with her mother during freshman year, change mailing addresses, and we are going to heavily document the time spent actually living/visiting in poverty with mom so that it actually does equal >50% and she can get that lower EFC. NO FRAUD here of any kind, completely operating within the rules of FAFSA Page 3! Freshman year will be out-of-pocket, (mine) but the remainder will be based on bio-mom's FAFSA and hopefully lots of grants.
My question: has anyone else employed such a strategy where separated parents have vastly different incomes? Does anyone see anything unworkable in this strategy?
Thanks for your input!</p>
<p>Some schools want that FAFSA filed freshman year, or there is a sit out period for financial aid, or you are considered last for aid. That could be a consideration. Also since aid for sophomore year is based on income for freshman year, the amount you give to her including college costs are supposed to be reported in that FAFSA. Not reporting such money is fraud and would be easily traceable. Also if the school she wants also requires a FAFSA, both parents' incomes will be taken into account. FAFSA only schools do not typically meet EFC, so what she would be guaranteed would only be the govt money, which won't be that much if your support dollars are included. The only way around this that I see, is if you do not pay anything for her this year 2007, and lend the money to her mother instead, but it feels fishy to me to do this. You need to talk to a financial consultant on how legitimate this scenario is. Financial aid officer are pretty savvy about certain games being played, and have the discretion to call you on anything that they feel is not right.</p>
<p>to add to cptofthehouse 's post...</p>
<p>If your D applies to a school that request the CSS profile or their insitutional aid form, your money (and your wife's at some school) is still going to be on the table and be counted.</p>
<p>
[quote]
Freshman year will be out-of-pocket, (mine) but the remainder will be based on bio-mom's FAFSA and hopefully lots of grants
[/quote]
</p>
<p>The FAFSA EFC is only used to determine one eligibility for federal aid (pell, seog, stafford and perkins loans). If your D is looking at a one of those 40k private schools that meets 100% of demonstrated need giving out a lot of that grant aid that you are looking for, rest assured that they will be looking for your financial information either through the CSS profile or their own institutional aid form. Remember, the "lots of grant" aid that you are looking for is given to the school through donations made by other people's parents.
So essentially you are saying to let someone else's parents pay for your child's education because I don't want to spend my money.</p>
<p>Those schools that require the FAFSA only, for example NYU, should your child be admitted, will not meet 100% of her demonstrated need and the part that they will meet will be heavy on loans.</p>
<p>Even at schools that use the fafsa only when it is time to renew, they will still have your finanical aid information on file especially if you are a full payer this year and the next year ask for aid. They will want documentation for your change in circumstances, and as cptofthehouse has already stated, it won't be hard to follow the money.</p>
<p>Please don't knock me around too much because I'm doing better than my ex. Many of us have paid a LOT in taxes over the years and if there is a way to get the feds to help me elevate another person into taxpayer status without pulling me down too much, then I think we are all better for it.<br>
Still, what do kids with two households, typically do? Surely there must be a good standard strategy when faced with two diferent incomes that doesn't involve putting one's financial head into a noose just because its the right thing to do for the less productive parent(s).</p>
<p>It's not that any one is trying to knock you around however I think you should remain cognizant of the fact that int he eyes of the college you and your ex spouse are the first source when it comes to funding *your child's * education regardless of your financial situation. The school determines financial aid based on the income and the assets of both you her natural parents (and at some school's stepparents).</p>
<p>One of the biggest things I have seen is parents are remiss to sit down and discuss with their children coming out of the gate, how much they are realistically going to pay /borrow for thir child's education. </p>
<p>Children having divorced separated parents (especially with the high divorce rate in the U.S.) is nothing new to financial aid officers. They have seen it all and heard it all from uncooperative parents (those kids end up between a rock and a hard place because the school will not give the child money because of a parent's unwillingness to pay especially if s/he has the income and the assets to do so) to students whose separated divorced parents both contribute their share to the financing of their kid's education.</p>
<p>It is not a matter of the right thing to do for the less productive parent is is about the right thing to do for your child</p>
<p>Not knocking you around. Though some here may, they go after everyone though, so don't take it personally. </p>
<p>Nothing wrong with your idea if it is legal. Any financial consultant who is competent will give stategies for reducing taxes and other liabilities. Any site or article on financial aid gives advice on what to do and where not to have your asseets during those key college years. </p>
<p>A friend of mine who was married to an attorney savvy with all aspects of finance paid off his child support commitments when their oldest child entered high school. He also took another mortgage to pay off the house where his ex and kids were living. She made very little money and reduced her meager pay even more during the college years, something she could do as she was working for her parents and would inherit the business someday. The two oldest wanted to go to State U that used only FAFSA, so they ended up with govt money, Pell, Seog, state grants, and subsidized loans. They may have gotten small amounts of merit money as well. Their college funds were spent down, so that the EFC was as low as it could get given the circumstances. Since dad did not give a dime during those years because he paid the obligation in a lump sum, no child support was in the picture. There may have been loan things going on as well, but that I do not know. The third child did go to a small private school, and dad did have to ante up, but the govt money still kicked in since that came as a result of the FAFSA EFC. Mom paid any amounts needed for all three kids so that she could get the Hope and college tax rebate which Dad did not qualify for. She was also single head of the house hold which gave her a nice tax credit and allowance since her income was so low. Dad could not use any of those tax credit or allowances since his income was too high. </p>
<p>Using this as an example, you could pay your child support expenses and obligations in a lump sum to your ex and/or as a mortagage pay off that can be borrowed when income is needed, or possibly though 529 contributions. This would reduce or eliminate your paying for your daughter next year having the money drawn from those lump sums, and therefore not included in your wife's or daughters FAFSA. With her low income she would qualify for the simplified needs test and not have to report her assets for assessment, and the home equity would not come into the picture anyways. With that low EFC, you D would qualify for govt money. If she wants a school that uses its own financial aid app or PROFILE, she would still get the govt funds, but your financials would be considered for any aid from the college funds. If the idea of giving your ex lump sums is dangerous, you would have to come up with some ideas of funds where the withdrawals are controlled. </p>
<p>The key to maximizing financial aid is starting early. For most parents, there is not much that can be done when they fill out the forms during their kids' senior year. By completing the forms several years early, just for private use, you can see where you are going to be hit up the most, and think about moving or spending the money.</p>