Thank you! I have the exact numbers somewhere, maybe it’s closer to 19K for the subsidized ONLY???
@kelsmom I am submitting some financial aid appeals for my current HS senior because we had significant one-time income in our base year. If the colleges take that into account, what are their options as to how they handle it? Can they take it out of the equation altogether? Alternatively, can they convert it to assets?
Also, one college wants to know what we spent the money on. Are some expenses considered more “legitimate” than others? And if we did spend the money on what they consider “legitimate”, (say, medical expenses or a younger child’s high school tuition) does it matter if all of the spending occurred in the base year vs the base year plus the next year?
Thanks!
There is always $2000 of the max that cannot be subsidized, so freshman year it’s $3500, then $4500, then $5500 and $5500. Not every student qualifies for subsidized loans or not for the full amount. There is also an origination fee, so it will cost you something.
Schools that approve a judgment request for removal of one time income will typically remove it from AGI but include it in assets. They ask about it because they might make a determination to exclude it from assets in certain instances. Each school will have its own policies about that. Also, if you still have the additional money in the bank, they want to avoid counting it twice.
@kelsmom - two Financial Aid questions. Thank you for sharing your expertise here, btw!
have an s20 (undergrad, FAFSA only school) and d16 (prof. grad school) this upcoming year.
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for 21-22; wondering if grad school student counts as having a sibling in college for S20 on FAFSA.
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cashing out on some home equity (HELOC) to help D16. Does that cash sitting in our account count as cash when filling out FAFSA for S20? **wrapping my head around this; home equity doesnt count on FAFSA, but does it count when it’s turned into actual cash through a loan?
thanks!
I recently looked into the graduate school scenario, since I will have 2 in college in 2022 and 1 in graduate school, and I was told the student in graduate school will not help with FA.
i sort of figured that would be the case. that’s a lot of kids in school for you, mjkacmom!
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Re this: for 21-22; wondering if grad school student counts as having a sibling in college for S20 on FAFSA
You need to contact the college where the undergrad sibling goes to college. Some colleges will count the grad school kid as a kid in college, and others absolutely will not. And this is even if you do list that grad student as a dependent who is pursuing a degree on the FAFSA
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The money sitting in the bank does count. Only exception I know of is if it is from other FA, like money left from the year before.
Best to transfer it to the D16 if that is what it is for.
For FAFSA purposes, a sibling will not be included in a grad student’s number in college. This is because the grad student is automatically independent and is their own household (parents/siblings not included). Schools that collect parent information for grad school may very well consider a sibling in college when determining their own aid, though. Contact the college to ask about that.
Yes, the HELOC money will need to be reported if in the account when the FAFSA is completed. So either don’t tap into it until after, or pay it before. (And the rule of thumb is to never try to think logically when it comes to financial aid! The rules are so often illogical … just read the rules and follow them strictly, because that’s the expectation.)
My child’s school’s offered my kid a full scholarship combined w her Pell Grant to cover her freshman year costs. Now Financial Aid office has contacted me because of a discrepancy between my CSS and FAFSA. after answering a bunch of emails that requested I confirm certain numbers, I was told I would have to refile 1040-X tax returns and redo my FAFSA because I had not put 2500. in cash that I earned in 2019. This all sounds nuts to me and my suspicion is that they don’t believe that I am low income. And that may actual turn out to be true based on the way they look at assets. When I divorced 3 years ago my ex took the house and paid out the difference of $90,000. to me of which I put into a brokerage fund for retirement and had always referred to this as my retirement account. Now I learn that it is considered an asset even know at 52 yrs old, a single mom, dad and child do not have contact… the savings is it is everything i have. no house no jewelry no car. i think this is what the Financial Aid people are looking for? truly thought it qualified as a retirement account… i know understand that it is not an official retirement account. what should I do? they stated clearly that her scholarship wouldnt be affected if the fafsa needed to be corrected… just the pell grant and work study… but they have me ammending my taxes now!
Unfortunately, financial aid officers get stuck being the tax police sometimes. They are required to make sure that nothing you report anywhere conflicts with anything else. It sounds like you reported some income on your CSS that should have been reported on your tax return. In that case, the financial aid officer is required by law to obtain an amended tax return from you before they can give you financial aid. You don’t have to file the amended return, but you can’t get any aid if you don’t.
I am confused about what you didn’t report, though. What exactly was the $2,500 from? Assets don’t go on your tax return, so it would be helpful if you can explain the $2,500 to me so I can better advise you. You say you put $90,000 in an account that is not a formal retirement account. Is the $2,500 investment income from that account? Did you get a tax form from the investment for 2019? If so, the amount on that form goes on your tax return. But how did the school know about this? I just want you to amend your taxes correctly. Also, the amount in the investment account has to be reported as an asset on the FAFSA.
Just to update the thread, @violetjessup has PM’d me to provide details of the situation. Things will work out, although it’s possible that the Pell amount may decrease.
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Hi,
Financial aid newbie here! I think so far, we have successfully negotiated through the financial swamp in that we filled out our FAFSA correctly, sent it to colleges, and accepted the financial package for the college my kid wants to go to…
I apologize if this question has already been asked (I didn’t read this whole thread, sorry!), but when is a good time to sign a student loan promissory note? My son will be taking out an unsubsidized federal student loan, which means interest starts accruing when money is disbursed. Does that mean we can sign the note anytime from now until fees are due, BUT the interest clock wont start ticking until the college is actually paid by the lender, correct? Please advise! Thanks so much for your help!
He can sign the MPN now, and he should also complete entrance counseling. Both are required before the loan will be disbursed. Interest doesn’t begin to accrue until the loan is disbursed; loans may not be disbursed more than ten days before the first day of the semester. The money is requested by the school, and the federal government sends the money to the school. Interest begins at that point (the lender is the federal government, who will assign a servicer to handle everything related to the loan). Only half the loan is disbursed each semester, so he’ll only accrue interest on half the loan for the first semester.
Please don’t hesitate to ask any additional questions you may have!
I have question regarding financial aid at any school. My older daughter is an undergraduate freshman and planning to finish in 3 years, so she will probably be graduating by 2024 and want to take a gap year before going to Masters. My younger one graduates high school in 2024. Do the colleges consider my older one is still in college for Financial aid calculations? Can I still say 2 kids in college for NPC?
It won’t matter, because number in college will no longer factor in effective 2023-24.
Thanks for your response! I am not familiar with this. What do you mean by that?
Recent changes to federal student aid have resulted in numerous changes to be phased in over the next couple years. One change is that the financial aid formula will no longer take into account number in college. Currently, having 2 in college results in the EFC essentially being divided in half for each student. Beginning in 2023-24 financial aid award year, the EFC (which will be renamed the SAI) for each student will not be reduced by any other students in college. This article is a good synopsis of the changes: https://www.google.com/amp/s/thecollegefinanciallady.com/2021/05/10/changes-to-the-fafsa/amp/.
Here is a good article that explains the reasoning behind the change to number in college: NASFAA | Removal of Number in College Yields More Equitable, Simple Application Process.
@hello06 but IF the two kids in college at the same time thing was still in effect…NO, you would not be listing two in college at the same time. One finishes spring 2024, and the other starts fall 2024, right? No time when both will be undergrads at the same time.
But as @kelsmom said…this won’t be a factor for the 2024-2025 FAFSA at all….which is your son’s first.
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