<p>I'm filling out my FAFSA, and I'm a bit worried that I won't be given much (or any) FA because I have a large amount of $ in a CD. My income last year was around $4k and I'm an independent, but I have a large amount of $ in a CD (around 100k). It doesn't mature for a few more years so I don't want to take it out and face penalties. Is it possible to put the CD in my parents name? I would like to do so ASAP since my school requires the FAFSA to be turned in my April 1st.</p>
<p>Thanks</p>
<p>It isn’t possible to put the CD in your parents’ names, I don’t think. First, you would have to withdraw it to do so (I believe). Second, if you GIVE your parents money it would be viewed as a gift and there is a dollar limit per year to do so (I believe it’s $12,000 per gift…so $24K).</p>
<p>Assets per FAFSA are assessed at 5.6% or so of the value of the asset for each year. You are talking about using $5600 a year out of your savings for your college education. You would still have over $75K left at the END of four years. What is the problem with using this amount of money towards your education?</p>
<p>EVERYONE wants to keep the money in their savings for future things…but the reality is you are fortunate to have this money. I’m sorry but 5.6% of your asset value is not a lot in the big scheme of things, and spending it on college is a good use of that money.</p>
<p>It’s for grad school at a private, 2 years, with tuition/room & board it’d be around 100k.</p>
<p>Is there another way to legally hide that amount, or at least a chunk of it?</p>
<p>Assets per FAFSA are assessed at 5.6% or so of the value of the asset for each year. You are talking about using $5600 a year out of your savings for your college education. You would still have over $75K left at the END of four years.</p>
<p>Thumper, I know you know a lot about these things. Is the 5.6% rule also true if the savings is the student’s? I thought schools assess student’s savings at a higher rate.</p>
<p>To the OP…ah…grad school. Well…this is important. Aid for grad school is NOT need dependent. It’s not like undergrad school where your EFC is related to aid and your need might or might not be met. Aid for grad school is mostly merit based, and is awarded based on the strength of your application. It comes in the form of grants, scholarships, assistantships, loans and sometimes work study. </p>
<p>No you can’t HIDE your assets…but really, it probably doesn’t matter since grad school aid is merit based…not need based.</p>
<p>Thanks for the help so far</p>
<p>So is the asset section of the application more of a formality? I’m not looking for a giant handout from the gov’t, but a little help would be appreciated.</p>
<p>I think the OP is saying that he/she wants to avoid spending her/his own assets and save for grad school. I think the only way to have done this would have been to give to parents before now, but not certain.</p>
<p>An independent student is eligible for the simplified needs test where assets are ignored. If the OPs AGI is below $50,000 and he/she is eligible to file a 1040a or ez or is not required to file a return (or meets one of the other criteria - dislocated worker, received means tested benefits) then he/she will qualify for simplified needs and the assets will be ignored by FAFSA.</p>
<p>So it really depends where the $4,000 income is coming from. If it is unearned income (for instance from CDs) then he is probably required to file a return and may not be eligible for the 1040a/ez (I think there is a limit to how much interest can be reported on a 1040a or ez - don’t have time to check right now though). In that case he/she is probably not eligible for simplified needs. If the income is from another source he/she may not be required to file or may be eligible for 1040a/ez, in which case is probably eligible for simplified needs.</p>
<p>Kind of a moot point for any federal aid as no federal grants are available for grad students, just loans.</p>
<p>
Student assets are assessed at 20% by FAFSA, not 5.6%.</p>
<p>I don’t know about independents, but the financial advisor at my mom’s job said it’s ~25% of the student’s assets and 5.6% of the parent’s.</p>
<p>
You won’t get even a small handout from the govt. For Grad students federal aid is limited to loans, no grant aid. Currently Grad students can get subsidized loans BUT there is talk about changing grad student loans to unsubsidized.</p>
<p>
It is 20%, not 25%. Don’t know where the adviser got that data from. It used to be 35%, then was changed to 20% 3-4 years ago. Never has been 25% (well not in the last several years).</p>
<p>Thanks for all your help. I’m okay with the opportunity to claim a loan, preferrably subsidized. Might be a stupid question, but will my CD asset affect my ability to get subsidized loans?</p>
<p>Oed…
Please clarify.</p>
<p>What year are you now in school? Are you in high school or are you an undergrad?</p>
<p>And, your assets will get assessed at a high rate since they’re yours.</p>
<p>There is no “federal grant” money for grad students. All money for grad school comes from the institution as “merit money”. the feds aren’t helping you with grad school by giving free money for that.</p>
<p>OP, are you seriously asking whether you can hide your assets so someone else (apparently the taxpayers of the USA) will pay some amount for graduate school that you can afford to pay for yourself? Well, there’s a new definition of chutzpah, folks!</p>
<p>As of now, I have a B.A. from a 4-year college. I took 2 years off to work and save up money for grad school. About 1/5 of my income for last year was gained from the CD and 4/5 was from a few months of working at a retail store. </p>
<p>I guess I’m worried that the CD will hinder my ability to get loans.</p>
<p>Subsidized loans are need based. If you are not eligible for the simplified needs test then your EFC will be around 20,000. If your school COA is more than 20,000 then you will have need and should be eligible for some subsidized loans.</p>
<p>for instance is your school COA is 30,000 then your need would be 10,000 (30k-20k). SO you would be eligible for subsidized loans of $8500 (the maximum for a grad student). The rest would be unsub.If your school COA is below 20,000 then you have no need so can only get unsub loans.</p>
<p>But there is a lot of talk about doing away with subsidized loans for grad students in the upcoming budget.</p>
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<p>My mistake…I’m sorry. I forgot this was a student asset.</p>
<p>Are you headed to grad school right now, or are you headed into a second BA program?</p>
<p>What is the purpose of the giant CD? Is there some particular reason why the money is tied up for that long and in only one CD, rather than in several smaller laddered CDs?</p>
<p>Is it necessary for you to pursue your next studies as a full-time student, or would it be possible for you to work and study part time? If so, you might be able to pay for your studies out of current income, and thus preserve your capital for the future.</p>