Please help! Parents gave $, gift or loan count as income?

Paying for College
21

You have two problems: the limited income (which raises their questions,) and how to explain the family support. And that you seem to have listed the grandparent money already, as a gift (or “something,” on FA paperwork?). On FA paperwork, that makes it look like either assets or theoretical “other” funds available to pay for college.

I’ll just say this as a starter, because a) this is common logic and b) yes, we get frozen when faced with this sort of task. I freaked at something I had to write and a savvy friend walked me through.

You phrase the grandparent money as what it is: support for living expenses. (Right? Not money for the college fund, not a discretionary windfall they gifted against, eg, your mortgage. Instead, money to help you month to month, right?)

You tell them roughly what it cost you for housing, food, etc. A defensible number. Presumably, you lived close to the line and the rough total of expenses you incurred and the total you lived on are close. You can say this was treated as interim help, that your intentions were/are to pay them back. You don’t have loan papers, nothing like a notarization or filing to support that, but it’s fine to say.

You note one bill was forgiven (1099,) a one-time event, necessary to reduce expenses, that you hope this will not be counted as on-going income. (Side note: 1099 IS treated as ordinary income, is taxable.)

You want this to be concise, so they can follow. Stick to the needed facts, don’t frustrate them with more detail and explanations than are relevant. State clearly and nicely that, if they need more info, you’re happy to provide it.

You have no control over how they react.

The next logical question will be: and then what? How did 2016 turn out?

22

@sybbie Thank you yes, I understand this will screw us over for aid. On top of all this, he never filed taxes, hasn’t since 2012 so on this profile he could only put estimated aid as to what he thinks he made. He says he can’t remember, he is a chef, works catered parties, PT work, gets 1099s and W2’s and cash. I assume they will use those income #'s the same as they would if he had the true amounts. I did put on CCS Profile his contribution would be 0. Will they just disregard that? Why do they ask that if they don’t pay attention to it, I did read that, as you said, it’s just his ability to pay, not what he will actually pay, sigh…

Roanoke we could do based on the merit aid she has and the college savings from my parents. I can believe her other grandmother, she has lots of $, owns malls in CA and is very close w/ my D. That school as well as SC in state and if any private school give us 100% need of course.

23

They know Can of indebt is not real $. With the CSS, they want the ex’s finances whether he thinks he can pay or not. They get to decide what they think his contribution should be. The lack of income tax filing is kind of a disaster unless he did not have to file due to low income.

24

@mommdc If it’s a loan there will be no interest. UR said to attach a letter explaining, if I liked. They will have to accept a letter from my parents stating it was a loan with no payments to me made for 3 yrs or whatever time period is better for UR, we can’t afford an attny to draw up something. I don’t know if I’d rather it be a gift, thats what I am asking here - which is better for UR? I am so confused.

My income was $4500 + $ from my parents. My expenses are very little. They gave me $20K in total. I only listed the initial $9K on the CCS profile as I thought the other wasn’t necessary on my taxes as it was a gift but which, as far as the IRS goes is ok (2015 allows you to be gifted $14K so each of my parents sent me a check) but it turns out for $ to live on , UR wants to know.

25

If the school requires NCP profile, they might not finalize her aid until your ex provides a “verification of non filing letter” from the IRS, which he might not be willing to order…

26

If they don’t care about getting it back, it’s a gift. If you want it to be a loan, you don’t need a lawyer, just a promissory note saying you owe them X. You will pay back by date xx/xx/xx at 0 rate of jbtrtest abd you sign.

27

WHT do you keep saying whatever is best for UR. You can’t game the system. It just is what it is.

28

@HRSMom, thank you, yes, they will decide what they think he should pay, even though he won’t pay anything. He made a good bit of $ but never files because he is a huge mess and can never find anything or keep records, etc.

29

@lookingforward Thanks for the advice, you’re right, don’t over explain, it’s all just such a mess though.On the CCS profile it clearly asks what other family will contribute to her education expenses in the 2017-8 year so I had to put the college savings plan from my parents. The other grandmother just told me a few wks ago & I didn’t yet add that.

Yes, my parents gave us $ for living expenses, not to save for school.

Yes, we lived VERY cheaply and I don’t even know if we bought any new clothes.

Sadly, 2016 was better but same sort of thing. Better last part of year, took a while to get work going, and 2017 is much better already.

30

I’d use the word “support” for the GP money, not try to figure if it’s technically a loan or gift.

Via “Professional Judgment,” they have some flexibility in how they treat your case. The only real working principle is that they offer all families in X circumstances the same sort of consideration and/or adjustment. If you play your part straight, they may be willing to categorize the GP support in ways that don’t affect aid negatively. Same with the 1099. But you can’t know until you get this first part done.

Once your letter is blocked out, you can call FA, nicely say you’ve got your response and do they have any additional tips, try to start a conversation.

For the father, you may need a Non-Custodial Parent (NP) Waiver. (No telling if they’ll grant that.)
…

But now you’re also raising the issue of the grandparents helping pay for college, one set or both. That’s also “money available to pay for college.” Another pitfall.

31

deleted, you did see my post.

32

@mommdc He already did the non filing form, as he didn’t file, but has to, IDOC just told him to estimate and say he has not yet filed. Not real helpful but at least it’s on record he completed the form & the schools have it.

@HRSMom I keep saying that because I am the one who has to write this up and so I have to make that decision of what to call it - I am not trying to game the system but I have to list it as SOMETHING and it really IS whatever I want it to be so is there a way that will make more sense to UR and not hurt my need aid situation? That is really all I am wondering/

33

Cloudy- if indeed your D’s grandmother is both affluent and generous, it seems like all of you could benefit from some professional financial advice.

1- Your parents can give you more than 14K per person per year. In fact, they can give you as much as they like, whenever they like. IF one of them gives more than 14K per year to a single individual, that person needs to file a federal gift tax form (the form takes 5 minutes to complete, you do not need an accountant to fill it out). No tax is due that year- either from the parent, or from you (the recipient). Since your parents have been generous to you in the past, perhaps some long range planning would be helpful.

2- I hope your D’s other grandmother has a long and healthy life. But stuff happens. If indeed she plans to help your D pay for college, you need to know whether this is just a “if I have the cash” type of deal (so if she dies, for example- the money stops) or if she’s set up an educational trust, or if she’s planning to leave your D assets when she does pass.

3- If there is an organization in your town that helps low income families with their tax and other financial issues (there are a few in my town- lawyers and accountants very generously volunteer their time) you could benefit from it. You may not be setting aside money when you get paid your lump sum income (whether 1099 or not, you will owe taxes on the money you earn) and you need to be paying social security. You also might need a professional to help you figure out health insurance for your D next year when she goes to college- maybe the college plan is right for her, maybe keeping her on your insurance is cheaper, etc.

Good luck to you.

34

@lookingforward I just see the 2 posts directly above and then the longer one earlier. I really appreciate your help! They want this form back of expenses to I have to do that and then will do the letter, good idea to just use the word “support”. I thought saying we had help paying for school would make them think we didn’t need as much so all that became less important? All this is just so confusing, I can’t seem to know the best thing to do!

We needed too much documentation for the waiver, I tried with several schools, called and explained the situation. The worst part is that I would not know until RD responses (around 4/1) if it was approved or not & if not, we would be offered zero aid & it would be either too late or not enough left to get any so too big a risk.

35

Cloudy- don’t over think the expenses.

You live somewhere- how much is your rent?
You eat- what did you pay for groceries last week- multiply by 52.
You own a phone? Or have internet service? how much is that?
You have health insurance- if so, put that down, if not, it’s not an expense.
Utilities- heat, gas?
Everything else- clothing, the dentist, your D’s glasses or whatever.

36

The financial support while you started your IC work is a different issue than whether the GPs will help pay for college. One task at a time.

Yes, having GP money available to pay college bills can affect aid. And for each year they do help pay the college bills, you’ll report that on the next set of FA forms. Many people, I suspect, just avoid mention of small sums that may fortuitously come their way. But in your case, it’s obvious you don’t have enough, on your own.

OP, first thing is to treat this like a task, try to catch your breath. We don’t know if any school will be helpful or not. But you’ll try to complete your part. The rest is in their hands.

37

^it really is that simple. There is nothing to worry about here. The level of income plus support plus loan/gift is still very very low. It’s going to be fine.

38

I’m thinking because they are asking for so much detailed info, that they are getting ready to admit your D. Why else would they be interested in getting clarification on income unless they were putting an aid package together?

39

No sense speculating about an admit, now.

FAOs do their work before the last minute. Per the regulations they’re subject to, they need to check certain sorts of situations and OP’s is clearly one of them: income shown doesn’t appear to cover living. OP has noted a need-blind college, so FA is just doing their own thing, chugging along.

Basically, I agree with HRSMom and Blossom. Just do your part, it’s a hassle, but just do it and see what happens. If the GP support (beyond the 529 or other savings plan) for the actual college expenses is uncertain, then don’t show it as certain.

But be aware-- you say 2016 income was still rough, but 2017 may be better. This will shift your FA snapshot, going forward to years 3 and 4.

40

I think the most important question for the OP is whether UR meets full need. If they don’t, it will likely be unaffordable