<p>Hi everyone,</p>
<p>I'm a rising senior and am starting to look into financial aid, etc. for college. All the schools I'm looking at are top privates which meet 100% of demonstrated need.</p>
<p>Now, my family has a relatively complicated financial situation. Both my parents (who never married) have very low incomes, around ~$10,000. My father has almost no assets.</p>
<p>However, my mother inherited quite a bit of land and has a stake in a family trust. Together, these assets total around $400,000.</p>
<p>Has anyone applied with similar financial circumstances? Any idea what I should expect? I've run the numbers through institutional calculators a couple times, but the EFC is highly variable (from $15k to $40k).</p>
<p>I can't ask my mother to dip into her assets too much, since she's planning to retire soon (she's 58).</p>
<p>Is there any way we should try to structure assets to maximize financial aid? We're open to a lot of things, and the money is fairly liquid.</p>
<p>
</p>
<p>There may have been ways, had you started earlier. Anything you do this year is going to be picked up on FAFSA and/or the PROFILE, and won’t do you any good.</p>
<p>I assume you live with your mother?</p>
<p>There are potential a few things. </p>
<p>You can look into the ‘automatic $0 EFC’ - I think this applies to incomes under 30K, but there are many tests that need to be met to qualify.</p>
<p>There is also the ‘Simplified Needs Test’ that exempts assests for the most part. That applies to incomes under about 50K I believe, and it too has many conditions, such as be able to file a short form 1040 for taxes, etc…</p>
<p>The other thoughts would be to put what she can into ROTH IRA’s as she can start drawing at 59.5 (contributions can come out earlier most of the time), or into a Life Insurance Policy if she has one. Neither of these is counted in most formulas.</p>
<p>Also remember that assets count at a much lower rate than income does. You might also have luck once you have been accepted to a school to write an 'appeal letter explianing that your mom needs that to last a long time for living expenses due to her low income. At least one school was willing to make an exception in our case that was similar.</p>
<p>djd</p>
<p>It’s likely that you would qualify for one of the FAFSA simplified formulas, both exclude assets. Here’s a link to the EFC Formula Guide. The qualifications are described starting on page 5:
<a href=“http://ifap.ed.gov/efcformulaguide/attachments/101310EFCFormulaGuide1112.pdf[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/101310EFCFormulaGuide1112.pdf</a></p>
<p>Your best bet is to have a few FAFSA only schools in the mix. If there is nothing being currently thrown off as income from the trust or the land you might qualify for simplified needs, but better read the instructions carefully and run the numbers and check with tax form your parents file. Profile schools might consider the land as an asset and her value of the trust as an asset.</p>