Questions re: filling out FAFSA Step Two (Student) - Q39, 41, 42, and 45J

Paying for College
1

I had E-mailed FAFSA (Federal Student Aid) Customer Service with a few questions I had, but they just told me to try Web-chat or telephone.
I tried that, too, but the people I Web-chatted or spoke with basically just repeated the FAFSA instructions to me.
When I pressed them, they gave answers, but I don’t know whether or not they really understood my questions.

Here are my questions:

If a student earns money, and then deposited that money into his savings account, that money essentially shows up twice on his FAFSA:

    Under Q39, in 'How much did you earn?'.

    Under Q41, in 'current balance of ... savings account'.

Similarly, would a (sizable) monetary gift that a student deposited into his savings account ALSO show up twice on his FAFSA?:

    Under Q41, in 'current balance of ... savings accounts'.

    Under Q45 J, 'Money received ... on your behalf ...'.

OR, can such a gift be excluded from Q45 J, since Q45 J says "Money received ... on your behalf, not reported elsewhere on this form"?

Similarly, for 529 plan CONTRIBUTIONS made by someone other than a parent:

    Would such contributions show up twice, under both Q41 and Q45 J?

    OR, can such contributions also be excluded from Q45 J, since Q45 J says "Money received ... on your behalf, not reported elsewhere on this form"?

Finally, for Q42 and Q91, 'net worth of ... investments', do we need to included accrued (but not yet paid) interest on a CD (certificate of deposit)?
For example, if a CD which pays yearly interest renewed 5 months ago, would something like 5/12 of the next expected interest payment need to be added to the money actually in the CD?
(5/12, because 5 months / 1 year == 5 months / 12 months.)

Does anyone know the answers to any of these questions?

2

If the student immediately deposited all of the money he/she earned, it does have to be reported on Q 39 and Q41. The same goes for Q45.

Regarding the 529 plan: " When the owner is some other person (including a non-custodial parent), distributions from these plans to the student count as untaxed income, as “money received,” states the FSA handbook. It is specifically worded as a distribution. Has there been a distribution from this plan yet?

Not completely sure on the answer for the CD…I would need to look into that a little more.

3

Is the student independent for FAFSA purposes? If not, the balance of any 529 account owned by the student or a parent is reported as a parent investment in question 91, not question 41. If the student is independent for FAFSA purposes, the balance of a student-owned 529 account is reported in question 42, not question 41.

4

Thank you for your helpful reply, kgos16.

Regarding Question 45J, though:

Upon further research, contemplation, and discussion (with others), it 
seems to me that Question 45J does not apply to the gift in question. 
The same gift was given by the giver to all relatives of a certain type, 
regardless of their financial or educational circumstances. That seems 
different from the *income* or *support* which Question 45J is talking 
about. 

A college financial aid official told me that the idea behind that 
question is someone is providing support such as paying a person’s 
rent for them. That seems to be substantiated by the following FAFSA 
information:

[indent]

    Although the FAFSA's Question 45J:

[indent]

        j. Money received, or paid on your behalf (e.g., bills), not reported 
        elsewhere on this form. This includes money that you received from a 
        parent whose financial information is not reported on this form and that 
        is not part of a legal child support agreement. See Notes page 2. 

    isn't clear on this, Question 45 is "Student’s 2014 Untaxed *Income*". 
    and the FAFSA Web site Help
    (https://fafsa.ed.gov/fotw1516/help/totalMoneyReceived.htm)
    says:

        What other money has been paid on your behalf?
        This is question 45j on the paper FAFSA.

[indent]

            Enter the total amount of cash *support* you (and if married, your 
            spouse) received in 2014 from a friend or relative (other than your 
            parents, if you are a dependent student). Report the amount if it is not 
            reported elsewhere on this application. 

            If someone is paying rent, utility bills, etc., for you while you attend 
            school, include the amount of that person's contributions, unless the 
            person is your parent whose information is reported on this application. 

            Include money that you received from a parent whose financial 
            information is not reported on this form and that is not part of a legal 
            child support agreement.

[/indent][/indent][/indent]

Regarding the 529 plan: No, there has not been a plan distribution yet.

Thanks.

5

Thanks, MiddKid86.

6

If you heard those details from a college financial aid administrator, go with that. I wasn’t totally sure what type of money you were referring to, but it sounds like it should likely only be reported under cash/savings/checking.

7

Thanks.

8

Before hearing back from the financial aid officer, I had stumbled across [Chapter 2 - Filling Out the FAFSA](http://ifap.ed.gov/fsahandbook/attachments/1415AVGCh2.pdf) of the Information for [Information for Financial Aid Professionals (IFAP)](Home | FSA Partner Connect)'s Application and Verification Guide, 2014–2015
(which is part of their Federal Student Aid Handbook, 2014-2015).

While I still had that chapter open, I noticed that it says:

STEPS 2 & 4 - Questions 45 and 94 - Untaxed income

...
j. Money received (45 only).
The student reports any cash support he received, but if dependent he does not count his parents’ support, with one exception: money from a non-custodial parent that is not part of a legal child support agreement is untaxed income to the student.
Cash support includes **money and gifts** and housing, food, clothing, car payments or expenses, medical and dental care, college costs, and money paid to someone else or paid for on his behalf.
For example, if a friend or relative pays his electric bill or part of his rent, he must report the amount as untaxed income.
If he is living with a friend who pays the rent and the student’s name is on the lease, the rent paid on his behalf counts as cash support because he is responsible for payments that his friend is making.
Note that this item does not appear in the parents’ question—only the student reports this information.

From that, it seems to me that monetary gifts should be included in Q45 J (‘Money received … on your behalf …’).
The money from any such gifts that had been deposited (and left) in the student’s savings account, would essentially be included twice on his FAFSA.

I do see that 529 contributions are different, because the 529 plan itself is counted (for the FAFSA of a dependent student) as an asset of the parents.

9

Correct, but that could be true of any money earned or received. If a student had a summer job last year and put the earnings in a savings account to use for buying textbooks this coming fall, that money would be counted twice (as 2014 earned income and as a current asset in a savings account).