<p>I am trying to help a young Independent qualified student with college apps. Student is on free lunch program. This student has some assets but would still be eligible for Pell Grant according to FAFSAforcaster. The asset would affect student contribution, though according to NPC on private school website. Someone came to speak about admissions at the State College at the high school, the student asked them privately how the asset would be treated for aid. The person told them to move the asset under a trusted person's name and gift it. The student followed this advice and gifted it to a trusted person. Student has submitted the FAFSA but not the Profile. </p>
<p>I am alarmed about this situation. Trying to think of the best advice to give. Undo the situation quickly? Get a financial adviser quick (how to do that?) I have just told the student that I am not sure of the legality of this and student doesn't want to do anything illegal. Yes student is orphaned so does want to retain as much of the small nest egg as legally possible.</p>
<p>The LEGALITY of what the person advised is a gray area, IMO, at best and how it would be viewed if it came out through audit that this asset was gifted and then returned after fin aid forms were submitted, is questionable. What is even more alarming to me, is that advice was given to a young person to GIFT assets that might be substantial to him when the risk of losing said assets when you do something like this exists. I don’t know any other way around getting the assets NOT counted, and when counted, it’s a hit on the EFC. </p>
<p>At this point, it’s done. So this student should get his PROFILE filed while the assets are still not in the account. Once the student has the asset back, the goal would be to prepay some tuition or other school expenses so that the student gets a check from the school as proceeds of financial aid, whether it’s a loan or grant, and put that money into an account, replacing his funds. Then he does not have to report that asset in future years as it’s source is now a financial aid award.</p>
<p>Well, Swimcatsmom has addressed the issue as to what the student COULD have done. Now after getting PROFILE done, he should get his assets back and for future years, you have some info he could use. I do not know how any given PROFILE school would view the assets and I don’t remember if PROFILE excludes assets that are financial aid awards. But for FAFSA, he’s set.</p>
<p>If the student gifted the asset, then legally speaking, he/she has given up dominion and control over the asset. Again, legally speaking, the student should have no expectation of getting the asset back. If there is an expectation that the student will get the asset back (wink wink, nod nod), then the asset was not really gifted in the first place and it should be a reportable asset for FA purposes.</p>
<p>I also discussed the issue of risk but it likely won’t be an issue but I don’t want to go into it (of course you can never rule it out). I can’t believe this person told the student to do this on their say so. The student can’t even tell me who this is or if they work for the colleges, she thinks so but not an admissions officer. She considered her an authority because she spoke to the class. The other thing is this money is going to be a problem for the other person too (as if money is a problem) but not this year.</p>
<p>This was just done and I believe the assets can be moved back if this is completely not a wise/legal route to go. If fafsa can be amended.</p>
<p>I don’t understand that solution cptofthehouse. The student wouldn’t be paying any tuition as they are only applying to meets full need colleges and they have no income. They are accepted to the state college that meets need, though no financial aid pkg yet as papers just recently submitted. Even with these funds they will get a lot of aid, without these funds they get full ride. If they had those funds, I guess it would be about completely depleted over 4 years no matter which school they go to with aid.</p>
<p>So student has one fafsa only school, so asset should be reported and will be ignored? The other colleges are CSS.</p>
<p>I’m curious. Did FAFSA even ask him about assets? When a parent or student qualifies for simplified needs, it often will sip the question about assets. (I believe some states require it - we qualified but were always asked anyway).</p>
<p>First of all, Swimcatsmom’s post shows that the amount would not be of issue under FAFSA.</p>
<p>However, if it were not, if a student get financial aid amounts from the school, due to overage after tuition, fees, etc are paid, that amount of aid can go into an account as an asset coming from an aid award. Assets comprised of financial aid do not have to be reported for FAFSA, and maybe PROFILE. I don’t remember about PROFILE. This exclusion is permitted because if a kid gets an award for living expenses, books, etc, and its sitting in an account on the day the kid is filing the financial aid form, it makes no sense that those assets get counted against him since that aid is designated to help him through that school year. So if someone gets financial aid, and has savings, it behooves him to spend down his savings, his own money,and keep the fin aid proceeds in an account so that amount does not have to be reported for FAFSA nadn PROFILE. </p>
<p>I’m not touching the advice about gifting the assets. At this point, they are gifted, not reported on FAFSA, and good luck getting the money back. I’ve seen this sort of thing go sour many, many times. </p>
<p>The PROFILE schools do not have simplified needs test per se and they are often harder on student assets than FAFSA is. HPY, etal excepted.</p>
<p>ok swimcatmom, I’m not sure, I didn’t help with filling that. I wish student had discussed it first, this is making me feel stressed because I don’t know the answer, but moving assets this way sounds outright shady to me and I don’t want the student to make a terrible mistake. Student was ready to move assets back on my say so but I’m not comfortable being the final word, just want to push in right direction. The funds can be got back in the short term, no question a 3rd neutral party has control of that right now (I’m pretty sure.) I’m going to discuss with that 3rd party, but they will have little insight.</p>
<p>fyi, swimcatsmom I checked and the FAFSA did ask if the student wanted to skip the asset portion, presumably based on previous and simplified needs, and student said yes. Student is disclosing on CSS.</p>