<p>The poverty line is the same regardless of where you reside. Many folks are buying their own health insurance. You are not the only one. This does not make your financial aid picture change.</p>
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<p>To have $27K in taxable INTEREST income, you must have a HUGE amount of assets…HUGE.</p>
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<p>Are you saying that it costs you that much more to live SAFELY in Westchester Co? Then consider moving to a less expensive area of NY state…or elsewhere. Cost of housing is also not factored into the FAFSA formula…for ANYONE.</p>
<p>If you want to have an emotional reaction to the amount of assets I have and not reflect upon the income and cost of living, you are not looking objectively at the entire picture. My uncle got all excited when he retired with $5 million in the early 1990’s. Now he has nothing, literally. How did that happen? He did not understand his situation and thought like you are now…“I have a HUGE amount of assets.” You need to look at it in terms of your liabilities as well. I found in working with money, that one needs to study it to understand its nature properly. This is not easy.</p>
<p>Yes, the poverty line is a national figure but that which it represents, the capacity to live at the lowest income level will vary by region. If I tried to move someplace cheaper to save money, I would have had to do it without my son. The cost of the custody battle would have exceeded an savings. What is the point of abandoning my son to save money for his college education?</p>
<p>If your current income is $43K and is all from interest and the COL in Westchester is $50K, how/why would you consider liquidating the assets you’re living on in order to fund an overpriced school choice? Your reasoning is mystifying to me. Btw, NYS has several other (non-Medicaid) programs like Healthy NY which provide health insurance to individuals and families at a reasonable cost. Here’s a link:</p>
<p>Your son is obviously 16 or older by now if he’s a HS senior…well beyond the age when custody battles would be an issue. Why would your ex even start one at this point? Do you share joint custody? If so, you should very carefully read the FAFSA instructions to determine whether you are, in fact, the custoidal parent for FAFSA. Anyway, if he’s under 18, a judge will simply ask your S where he wants to reside and that would be the end of it. If he’s 18 already, it’s a moot point already, so this line of reasoning also makes no sense to me.</p>
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<p>Have you actually submitted FAFSA and received his SAR? If so, it sounds as if you’ve made an error that will need to be corrected. Tax-exempt interest income is reported as untaxed income for FAFSA on line 92 - same line you would report child support received, untaxed IRA distributions, untaxed pension and disability income on. That ALL has to be reported, regardless of whether it appears on your tax form or not. </p>
<p>FAFSA doesn’t take the cost of living for any particular area into account. Where and how you live is a personal choice. At the end of the day, you are a person with moderately low income and more than typical assets. You will get the same income and asset protection as anyone else would, minus the allowances for employment expenses. Your kid may qualify for something less than the maximum of federal and state aid if you manage to file the paperwork correctly. Schools are not going to give you extra money because simply you wish to live in an expensive area and want to conserve your assets. Your situation is not unique and it doesn’t sound as if your child has had to overcome any extreme hardship in order to attend college…he has great instate publics he can choose from and I would strongly urge you to consider whether going through all this money is going to be worth it if he decides to change his major, as the majority of college students do. It would probably be in his best interests over the long run to go to a solid, affordable school that offers a variety of good programs. If your kid has good stats, I would look for merit aid to fill the gap. Sorry, but everyone has the same problem…welcome to life as the parent of a college kid!</p>
<p>“If your current income is $43K and is all from interest and the COL in Westchester is $50K, how/why would you consider liquidating the assets you’re living on in order to fund an overpriced school choice?”</p>
<p>Good question. It has to lack of sophistication on my part in the ed process. Now I am looking at what is in his best interests over the long run and balancing it against what I think I can pull off.</p>
<p>As for the custody issue when I foresaw the problems I would face, first you need money to get before a judge. Second, the damage to him would have been vast. It was not an option. As for moving now, in my work I have committed to help a certain group of people and when asked, you just don’t reneg and leave. Not happening. I take responsibility for the risks involved…obviously.</p>
<p>As for the fafsa filing, I was never given an opportunity to fill out line 92. I filled out agi and the 1040a question. On that page it asked me if I wanted to answer the other questions in finances. I said no, and the next thing that came up was the signature page. Was this misfiled? That said, net of tax costs in filing a 1040a, I would anticipate receiving roughly 50% of the pell grant net and 25% of the tap funds. Does this seem about right?</p>
<p>PS. “At the end of the day, you are a person with moderately low income and more than typical assets.” For this to flow logically in fafsa terms, you can’t have 100% of the income come from the assets. No assets, no income. So you can’t justify taking assets away because the income is sort of okay because after you take the assets away the income will no longer be okay.</p>
<p>Steve, it’s possible that the formula did give you an Auto 0 if you reported that you’re eligible to file a 1040a and will have an AGI of $27K. The FAFSA uses skip logic so you don’t necessarily see all of the questions. I don’t know whether what you saw or how you responded is correct or not as I have never NOT seen the question about untaxed income…I think it’s likely that since you met the criteria for Auto 0 (income under $31K and filing a 1040A) it probably ignores all other income. That’s not saying that you’re home free as a FA officer at your son’s school might spot a problem and you’ve still got a 1 in 3 chance of having one dig thru the details of your finances and FAFSA filing. Suggest you print the SAR summary and go through it with a copy of the FAFSA instructions just to make sure you filed correctly.</p>
<p>Is this definitive? Everyone says to file as eligible to file 1040a, you can’t put down anything that would go on a 1040. Here they say:</p>
<ol>
<li>Eligible to file a 1040A or 1040EZ. Indicate your parents‘ eligibility to file one of
these forms (even if they filed or will fill a 2010 IRS Form 1040).
Answer ―Yes‖ if your parents
make less than $100,000,
do not itemize deductions,
do not receive income from their own business or farm, and
do not receive alimony. </li>
</ol>
<p>Is this just sort of general guidelines? Still helpful but I just want to know what I am looking at…</p>
<p>Yes, those are general guidelines. I think they stink, to be blunt. I would prefer they link to the IRS explanation for “Which form must I file?” I get tired of having to collect asset info for families who answered the question wrong & skipped asset info … if I update the tax return answer without collecting & entering asset info first, it results in an unofficial EFC (which can hold things up if we are trying to get aid paid out).</p>
<p>The reason they ask if you “want” to skip the other questions is to make things convenient for the people who DON’T HAVE any information to provide. It’s not because submitting information about your other income is optional. </p>
<p>The form comes with instructions. It might be to your benefit to read them before debating the financial aid office. (I mean, if you happened to be right about something, wouldn’t familiarity with the instructions be the best way to find out?)</p>
<p>Anyway, here’s what the instructions say:</p>
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<p>So you’ve got to enter all of those amounts. You don’t get to opt out simply because you don’t feel like it. </p>
<p>If you do skip over parts of the online form because you don’t want to have to be bothered with all the details – then when the financial aid office fills in the missing part, they are doing their job.</p>
<p>Unearned income reported on the FAFSA is weighted more heavily in the financial aid formula, precisely because it isn’t taxed. That is, FAFSA automatically calculates and subtracts out FICA taken from earned income, but not for unearned income. </p>
<p>If you have both taxed and untaxed dividend income, if you enter your actual taxes paid, your EFC is being calculated from the net. So if you look to what sources your EFC is derived from – the taxed income is being considered at a slightly lower rate than untaxed – although mathematically it doesn’t make much difference. </p>
<p>I mean, you can look at it as:</p>
<p>[(taxed dividends - tax) + (untaxed dividends) - income protection allowance] x FAFSA %multiplier = parental contribution to EFC from income</p>
<p>or</p>
<p>[(taxed dividends + untaxed dividends - tax) - income protection allowance] x FAFSA % multiplier = parental contribution to EFC from income </p>
<p>Either way the math is the same – but for someone with more modest income, it might be something to factor in when making investment choices & considering the impact of investment yield on EFC.</p>
<p>(When you look at your own figures… you are going to need a stiff drink, because as soon as you factor in the muni bond income, you will be over the simplified needs analysis threshold, meaning that you need to enter in the full value of all your assets, which - after deducting for an asset protection allowance - is assessed at a rate of 5.6%. One added note – since you are divorced, your asset protection allowance is less than half of what it would be if you were married. Funny how that one works, but that’s the way the cookie crumbles)</p>
<p>If your son is only getting 50% of the Pell, he does not have a $0 EFC. A $0 EFC would net him the full Pell grant (I believe this is correct). </p>
<p>The Pell is reduced for those with an EFC that is higher than $0 up to about an EFC of $5000 (a little more I believe). Once you meet exceed amount you get $0 Pell.</p>
<p>In defense of living in a high cost of living area like Westchester, NY–According to the fin aid director of Sarah Lawrence College in Westchester (and btw the most expensive college in the US), FAOs are aware of the high cost of living in the NY tri-state area and factor that into their awards. According to this FAO, for every $1 of cost in other parts of the country, it is $1.50 in the tri-state area. Whether or not you agree, that is what this one FAO said. (and no my D is not applying to Sarah Lawrence). But this is all an aside to the main point of this thread. Just thought I’d throw it out.</p>
<p>That may be true at Sarah Lawrence (where I believe they guarantee to meet full need, don’t they?) but I would wonder if NYU "adjusts " for higher cost of living areas. I doubt it.</p>
<p>Calmom, I’m not sure from what kelsmom posted that untaxed interest isn’t excluded. I think she was only addressing the issue of folks who had incorrectly identified themselves as eligible to file 1040A/EZ. The FAFSA question about entering other, optional financial info is one that I take to mean it is truly optional. If the qualifier is AGI under $31K + 1040A/EZ, it’s very possible that t-e interest is not factored in, even if reported. It certainly is never included in AGI! It doesn’t make a lot of sense as it would mean everyone who derives most of their income from untaxed sources could be Pell eligible without limitations…as we all know, stranger things can happen! Btw, I believe he would still qualify for the asset exclusion as the AGI criteria for that is AGI under $50K. His AGI is only taxable interest and dividends of $27K.</p>
<p>Calmom, I don’t think your math is correct. I basically agree with sk8rmom’s calculations. There would be a limitation on the amount of t/e interest you can earn, depending upon the amt. If you break the amt, you can’t file a 1040a, which eliminates the simplified formula and then they can access your assets (which will be needed to generate the t/e interest). I don’t understand amt very well however. I am not sure if I really do have an option or not to report the financial data. NYU already knows of my assets (I actually included ira’s when I gave them the data/don’t own real estate). On the surface it seems proper to report it because I am not trying to hide anything. But in terms of dealing with an institution that does not seem interested in fairness, helping them in their endeavors to be less fair somehow seems off. (as they say, when on a pirate ship, be a pirate…) Anyway, after tax losses from filing a 1040a, my estimate is about 1+k from Pell grants if the income is included and also about 4k from tap. I would get this for at least 3 years if I pay my share up front and his mother contributes towards the end…</p>
<p>Strange…here is the text when I skipped the questions - </p>
<p>Based on your answers to certain questions on the Free Application for Federal Student Aid (FAFSA), you may be given the option to skip additional questions. If you are given the option to skip questions, keep in mind that doing so will not affect your eligibility for federal student aid.</p>
<p>Some schools may require answers to these questions to determine your eligibility for college aid. However, answering these questions will not affect your eligibility for federal student aid, such as a Federal Pell Grant.</p>
<p>Okay, now I’m weirded out. The govt system seems screwed up. I inputted the t/e income and it spit out a 0 efc with max pell grant. What else am I supposed to do?</p>