<p>DS' best friend is 18 and basically on her own financially (very complicated family situation). One bright spot for her is that she has access to a trust fund that she can use only for educational expenses (undergrad or grad school).</p>
<p>She has received a full-tuition scholarship to an OOS school, and it is her understanding that she can use the trust fund for room and board and books, but not for travel expenses. However, she is very concerned about being able to afford flying home several times a year to check on her younger sibling, who has behavioral issues and little parental support.</p>
<p>Can she take out an unsubsidized Stafford loan to be used specifically for travel? If I am understanding correctly, the amount of the Stafford loan would be paid directly to the school, but would then be refunded directly to her if it causes an over-payment. Is this right? She would probably just need one $5,500 loan to get her through all 4 years. Would the fact that she has access to the trust fund preclude her from qualifying for the Stafford?</p>
<p>She can still take out the Direct Loan for students (Stafford) on an unsub basis, but the issue would be getting a FAFSA submitted. If she is a dependent student, and without a court order separting her from her parents and other criteria that she probably does not meet, she is going to considered dependent, the FAFSA is going to require parental input of tax info for income numbers and asset info that the parents have (one parent if they are separated, divorced, plus any stepparent of the one if relevant). It is possible to get an override of that parental part of the FAFSA but it is a pain in the neck and the student needs to work with the fin aid office of the school to get it.</p>
<p>I’ve seen situations where parents flat out refuse to fill out the FAFSA or give the info needed for it to be filled out. SInce it is verified with the parents’ tax info, it can’t just be filled out by estimates and parental electronic signature is required. I’ve known parents who not only refuse to fill out the FAFSA, give info for it, give permission for the signature ; they also refuse to sign the statement saying they refuse. They just refuse to sign or certify anything, and that makes it difficult, but not impossible to get over that stumbling block, but yes, it can be done. </p>
<p>But, no, the trust fund does not preclud her from the unsub Stafford. It is available even in there is no need. As long as her scholarship does not go over the total COA, she can get the Stafford. The FAFSA is going to be the bottleneck part of the process.</p>
<p>Thanks, cptofthehouse! Let’s hope her dad will cooperate with the FAFSA since it won’t actually cost him any money…</p>
<p>If he refuses, there is a statement that can be used saying that he refuses that he can sign. If he refuses to sign that then the student has to work with Fin Aid --they do have ways around that but they tend to require the fin aid officer to get involved. Hopefully it does not come to that.</p>
<p>Um…I believe that “statement” the parent signs about not doing the FAFSA requires them to also NOT provide any support to the student AND state that this student will not be a dependent on income taxes. It is NOT just a statement saying the parent won’t complete the FAFSA. There is more to it than that!</p>
<p>And some parents refuse to sign even that. I’ve seen that. The fin aid office then gets involved and in the few cases that I know that went to that, the Staffords were processed. But it was a hassle. </p>
<p>"Section 479A(a) of the Higher Education Act of 1965, as amended by section 472(a)(4) of the Higher Education Opportunity Act of 2008, allows dependent students to obtain an unsubsidized Stafford loan without parental information on the Free Application for Federal Student Aid (FAFSA) if the college financial aid administrator “verifies that the parent or parents of such student have ended financial support of such student and refuse to file such form.” "</p>
<p>The tricky part is the ending of financial support if health insurance and other things are being covered by the parents. But if the parent refuses to cooperate one bit, and the student signs a state ment that the financial support is ended, the loan can go through. It’s not the way one wants to go, however.</p>
<p>The official cost of attendance of every college, instate or out, always includes travel as an expense. She should print out the COA from her college website and submit that to the trustee as usual expenses that are a recognized cost of attending college. It might not be enough, but it will be something.</p>
<p>Does trust fund require receipts? Most COA have generous book and personal expense estimates, there might be some cushion there for some travel. Agree with BrownParent that it’s worth checking with the trust administrator who should have the students interests as a priority.</p>
<p>She isn’t going to have any trouble with this if FAFSA is filed because she is paying a large amount of the COA and the college/feds are not going to care if it’s from a trust fund, bank account, or any other personal resource. She’d only have an issue if she were borrowing the money from some federally backed source or had, say, outside scholarships paying for everything up to COA. Then borrowing anything on top of that would be an issue. You could have your entire COA covered by trustfund and still borrow the Stafford Direct student amounts. Doesn’t matter.</p>
<p>Thanks, everyone! I will pass the info along.</p>
<p>I do not know the exact terms of the trust, and I have a feeling that she doesn’t either. I am just trying to provide her with options; she was leaning towards going full-pay to a closer (but still OOS) school so she could afford to come home as needed, but that will cost her over $100,000 more over 4 years, which is money she could use for grad school.</p>