Question on FAFSA Assets and EFC Number

Hello! I apologize if this has already been addressed on the forum before, but I had a question about FAFSA. Due to a mix up, I had to wait a year to attend college out of high school. I used this time to build up my savings so I could put the money towards a nice college. My goal is to attend a local university, decide my major, and transfer to a different, more reputable college depending on what I choose. I earned a 4 year scholarship to the local university and applied for FAFSA. I need to go back to edit when my mom actually files her taxes, but I have the exact numbers for what she will file. MY EFC number is around 7,000 because FAFSA accounted for my savings (Roughly 6,000). I know my EFC number is high enough to where it is unlikely I’ll receive any aid. I was hoping to use any FAFSA aid towards my living expenses and books so I wouldn’t have to work too many hours and could put more time into my studying.

My question is whether it is legal to transfer my savings to a family member’s account. I don’t want to get into any legal trouble by trying to hide my savings, but the entire reason I saved that money was to put it into a nicer college. Even if it is legal, am I able and allowed to change the asset amount when I go back to edit my FAFSA and change my mother’s tax status to ‘Filed’? I appreciate any advice and I thank you in advance!

Once you have entered a figure into the cash, savings, checking question - you are unable to go back and make changes. The college with question the update, because the question specifically states “As of the day you filed the FAFSA, how much do you have in cash, savings, and checking accounts.” Unfortunately, there isn’t any way around this after the FAFSA has already been submitted.

You will definitely be awarded the $5,500 Direct Stafford loan, which can help you with your living expenses and books.

The $6000 saving was assessed at 20%, so $1200. If your EFC was raised by that, it would have been $5800 anyway (probably based on your parents’ income) and your EFC still would have been too high for a PELL grant.,

Ah, I see. I wasn’t sure whether I’d even be able to change it this year anyway. I’m trying to avoid loans at all costs, but I really appreciate the information! I was just checking to see if there would be a way to avoid compromising my savings, but at least I’m prepared enough to where I have that cushion; I could definitely be in a worse position. Do you know if it’d be okay if, when I apply next year, I were to transfer any savings I might have at that time to avoid a higher EFC number? (On an unrelated note, your frenchie is adorable!)

ETA: Sorry, I missed your comment twoinanddone. I wasn’t aware of that, I thought it put all of my savings into the EFC number. But that’s good information to know, thank you!

Thanks Eliahna! That little guy is my pride and joy. A better idea would be to transfer your savings to a 529 plan to be used for school. This can be considered a parent asset and is assessed at a lower percentage. Transferring funds to someone else’s account when they are your savings is dishonest. You are going to get differing opinions on this topic though.

Actually you can change the asset amount after your original submission BUT only if there was a MISTAKE in the original reporting. You cannot update with different info, if the original info was accurate.

Where exactly do you plan to transfer this savings to? If it is still your money…it is still your money, regardless of where it is. And you have to report it as yours.

Open a bank account, joint with your mother, her name and SSN first. it can then be reported as her asset, not yours but you have access to it. Either that or give it to your mother outright as remibursement for all of the expenses you incurred while living at home and she can put it into any of her account and include it in what she chooses to give you over the school year.

But once you reported that asset value for this year, that’s it. You can think about doing it next year, but unless there was an outright mistake, you cannot change asset values on FAFSA. Deciding to give the money to your mother later, does not count as a mistake.

Is it true true that student savings (assets) don’t have to be reported if they are from financial aid? For example, the money a student receives from a pell grant while in community college or any other school?

The better plan would be to have a minimum amount of money in your account the day you file your FAFSA. So…use that money to pay your tuition bill, or buy books. Make sure that the day you file the FAFSA, your account balance is low. Then just report that honest balance.

WRONG. Simply putting the money in someone else’s bank account, even a joint account where the joint account owner’s SSN is listed first, does not magically change the money into the other person’s asset.

You mean if a student has $1000 under their mattress and goes and puts it under the parent’s mattress it doesn’t change into a parental asset?

You can ask the college fin aid offices to which you apply if you have to include money in an account that you are joint for access reasons with your parent, or if it can go as a parental asset. The 8 schools I asked had no problems with it, but do ask. Any interest on that account will show up as your parent’s. If the school fin aid officer nixes this scenario, simply give the money to your mother and she can do what she pleases with it, including paying your tuition and expenses with it.

If you take the $100 and put it under a mattress and it’s still your money, you have to report it. If you give it to someone, anyone, it’s no longer yours after you give the money to them. That person can do as s/he pleases with the money, which is no small risk even with parents, in some situations, where the person can spend it on other things and not help you out with your college.

No, but I think if you wad it up and stick it in your mom’s purse when she’s not looking that may have an impact… :wink:

That’s true.

I think the best approach (if, for some reason, putting the money into a college savings plan is somehow distasteful) is to spend it down on college expenses.

If the FA person knows what she’s talking about, she’ll say “if it’s the student’s money, report it as a student asset, no matter where it is.”

Edited to add an exception: a student-owned 529 account is reported as a parent asset, for FAFSA purposes.

I think there are two questions here.

  1. What if the student has been putting money into an account where the parent is the primary holder.
  2. Can the student MOVE the money into such an account?
  • Unless the student is making a legitimate gift to the parent, the money remains the student's asset.
  • The student can move the money anywhere he/she wants, but unless the student is making a legitimate gift, the money remains the student's asset.
  • Actually, if you make a legitimate gift of the money but have it an account with the primary name as yours, it still will be flagged as YOURS in an audit. You need to have the money out of any vehicle that is considered yours in an audit/verification situation. It does NOT fly to say that you gave all of your money, in your account to anyone. That a joint account that has the primary person’s name and SSN on it, gives that person ownership of the account. It 's the same situation as being allowed access to certain accounts under certain situations, or even any situation–the money is still not yours. I had such an account with my MIL. It was HER account, but I had ready access to it, the way the account was set up. as well as POA. BUt it iwas not my asset for tax purposes or anything else. FAFSA does go with what the tax documents verify in a number of situations, and this is one of them. I have access as a user to a number of accounts for a number of business and charity purposes and my name is on there as a registered user, and some other term that I can’t remember in my senior moment here, but it is NOT my money. THe IRS, FAFSA, none of these things consider those accounts mine, though I have unrestricted access to the money.

    Joint account owners own the account jointly (imagine that!). But that doesn’t necessarily meant that one account owner or the other has full entitlement to all of the account assets. If a student takes her money and puts it in an account jointly owned with a parent without making a gift of the deposit, the money remains the student’s asset, regardless of which account owner’s name and SSN is listed first on the account.

    I have a joint account with my husband that is different from the ones I have accessibility with the children, my MIL and others . To make the chain of custody perfectly clear, the student can give the funds to the parent as a gift, maybe with a thank you card for all the parent has done, and state s/he has made a gift of all the money. Parent can then set up account as his/hers but give student access. The fact of the matter is that it all shows up the same in terms of tax records, verification purposes, and if questioned, intent. Having been verified, and having such accounts and having an accountant aware of them and having asked about how this works, I can tell you that is the case.

    There are situations that are outright fraud. There are some that are not. In my state, we are supposed to report and pay sales tax for all personal purchases made out of state for which we paid less than our state sales tax. There is a form to list such purchases. Many states have this same rule. But there is absolutely no mechanism of enforcement for it, and the number of those tracking and reporting these purposes and paying sales tax is very small on an individual basis. Any accountant will tell you not to bother. But the rule on the books technically call for this. The same goes for accounts that are reportable and considered owned by one person, but allows access by others on a basis that is the same as joint but not so treated. DH and I have a joint account. Both names show up on the statements, checks, etc. Not the case with my kids accounts. It’s mine, but they have access. I don’t bother to even claim my atm card and check book, but have full access to the account as it is mine, and I have given them full access as well, and they have a check book and atm card in their names for those accounts. They put money it to that they are giving to ME when the account is so set up. If I flip it so they are primary on the account, which I have done, then I still have full access,but it is now their account, the amounts are their assets and they report anyinterest on the account as theirs for tax purposes. I’ve worked with these accounts for over 20 years now.

    If anyone is uncomfortable with such an arrangement, ask the fin aid officer who represents FAFSA and is considered an agent thereof. It’s not my opinion that counts on these cases, but how they are handled by the colleges.