<p>Well I got need based aid to cover almost all my expenses, the thing is I'm not fond of loans, I'm willing to take the subsidized stafford loan, but the unsubsidized stafford is a concern to me. Since my EFC=0 and I'm getting all this need based aid, is there anything wrong with having a grandparent or uncle/aunt pay in place of the loans? Or will that make the finaid office suspicious to my EFC actually being 0? Should I just take it all and pay it off immediately following graduation or is that a waste of interest when they wont mind either way?</p>
<p>Why wouldn’t you just pay off the loans at the end of each year?</p>
<p>idk, does the school know what my loan balance is once I take it out? Or would I have to tell them my loan balance when filing for financial aid? If I do, they can see I paid it off.</p>
<p>When your loan is dispersed to the school, you will receive a note from the loan folks telling you that they have dispersed $X to the school. You can pay it off at any time after it’s been dispersed to the school. The school does not keep track of your repayments. They only keep track of what they receive.</p>
<p>I don’t think it would make any difference to the school if a relative paid your bills for you, nor would it make them question your EFC. (Although don’t have them pay it directly to the school or that can be considered a “resource” by some schools.) However, where it might affect aid for next year is that you are asked on the FAFSA if anyone other than yourself or your parents paid any bills on your behalf. That is where you would be expected to report the support from your relative(s) for the following year’s FAFSA. The FAFSA will consider that amount as “untaxed income” and that will then be factored into your next year’s EFC as though you actually earned that amount of money.</p>
<p>However, if your relative(s) just give that money to your parents as a gift, and then they use it to pay for your school instead of loans – then I think there’s no problem. Parents are not asked who gave them money or paid bills on their behalf – just the student is.</p>
<p>Or you could take out the loans and quickly pay them back – but you’d be doing the same thing, that is, having someone pay bills on your behalf. It would be much simpler if if the money could just go to your parents as a gift and they could use it to pay your college bills, and not bother with the loans at all.</p>
<p>Maybe Kelsmom will weigh in here!</p>
<p>Wow…you have very generous relatives!! Aunts and uncles paying for your college costs??</p>
<p>Since the OP’s family has an EFC of 0, doesn’t that mean he can have as much earnings/savings as he wants?</p>
<p>If so, then why can’t the generous relatives just write him checks, he deposits them into his bank account, then he electronically pays his college bills with that money? If so, no loans would be needed at all, right? Since his family has an EFC of 0, can’t he be given money from others as Grad money, birthday money, holiday money?</p>
<p>Or, am I overlooking something?</p>
<p>One thing the generous relatives need to be aware of…is the gift limits. I’m not sure what they are now…but they can’t each gift more than a certain amount to one person annually. This does not sound like an issue.</p>
<p>mom2collegekids, I think it would depend on whether the OP has an “automatic 0 EFC”, as opposed to just a calculated 0 EFC.</p>
<p>We do not have a 0 EFC, although my kids did get a smallish partial Pell grant for this year. My brother paid for part of my D’s college costs last year, and I declared that money on her FAFSA as “paid on her behalf”. At first that gift from him, since it was counted as her unearned income, made her ineligible for the Pell at all. Then he checked his records which showed he gave her a bit less than I remembered, so I corrected the FAFSA and she just squeaked by for eligibility again.</p>
<p>That’s how I know about the “bills paid on your behalf” thing. But the FAFSA does NOT ask parents about gifts or bills paid on their behalf. It’s kind of silly how it’s arranged. From now on if my brother wants to help, he just has to give the money to me. Then it’s not reported. I don’t know why they stick that piece in there for students, it’s one of those rules that just makes you cynical about rules in general.</p>
<p>$13,000 is the maximum a person can give to one annually before they are taxed to answer the question above.</p>
<p>I’m actually considered an independent for special circumstances, so there is no third party to accept the gift and pay it.</p>
<p>OP: Contact your college. My D’s uncle wanted to kick in some money toward her college, and I was worried about how it would affect aid packages. It varied, but most of the schools told me that it would be considered a resource, and thus reduce her aid in some way or another. </p>
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<p>'rentof2: Time has mercifully blurred my memory of the financial aid app season, but when we were searching for some way to allow D’s uncle to help, we were told that the gift would have to be reported somewhere, somehow; I can’t remember the details. But I know that we tried very hard to find a way, and ended up not accepting his gift because it would most likely have done nothing but reduce her aid.</p>
<p>But yes, we need to hear from one of the pro’s.</p>
<p>ETA: Maybe the best course would be to take the loans, and then take the gift after graduation and pay them off.</p>
<p>I was curious about this --again-- because of this thread, so I Googled the topic and turned up this post on a forum for law school students:</p>
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<p>[FAFSA</a> EFCs](<a href=“TestMasters LSAT Prep Course | Live and Online Classes”>TestMasters LSAT Prep Course | Live and Online Classes)</p>
<p>This was in reference to answering the question about “bills paid on your behalf.”</p>
<p>Interesting. I wonder if anyone else has just called FAFSA and asked them this point blank? Might be worth doing for the OP. Should I find myself in that situation again, I certainly am going to!</p>
<p>I found this post on a forum for med school applicants:</p>
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<p>Oh my!</p>
<p>Interesting. I interpreted “bills paid on your behalf” as, say, when someone pays your utility bill or car note for you. From the college’s standpoint, if someone else is buying my (the parent’s) groceries for the year, that amount of my income would be freed up to pay my D’s college bills, and could thus reduce her aid.</p>
<p>Now that I’m looking at our FAFSA from last year, I see that one of the sub-questions for Q47 asks for “Money received or paid on student’s behalf.” That question isn’t asked for parents, but it does ask for “Other untaxed income or benefits.” So if someone makes my mortgage payment for me so that I can send D to college, should I report that here? The instructions aren’t completely clear, but I would have had to twist myself into a pretzel to justify not reporting it.</p>
<p>BTW, PROFILE closes the loophole. In the Student Resources section, it asks for “the amounts you expect to receive from your relatives [excluding parents] and all other sources.” And lest we try to avoid reporting it by claiming that it was a gift to the parents, PROFILE asks in the Parents’ Data section for “any other untaxed income and benefits your parent expects to receive.” Both student and parents are also asked for “Cash received or any money paid on your behalf.” So somewhere in there, we would have had to report Uncle’s contribution. Since D was applying to a number of PROFILE schools, we decided not to risk it.</p>
<p>Oh, yeah, Profile is very explicit about it. What I find odd is the different answers students get when asking FAFSA about it.</p>
<p>I read another Q&A about that FAFSA question with a college FA official. (I don’t have the link, but if I can find it again, I’ll post it.) He said that people interpret that question differently and that, truthfullly, students shoot themselves in the foot by reporting it.</p>
<p>I hate the whole “take on debt to build your credit rating” scenarios. But in this case, it does kind of make sense.</p>
<p>Take the loans, then take the money at graduation and pay off the loans. No impact to your FA, and makes you look better on your credit report.</p>
<p>Why can’t the OP “borrow” the money from his relatives? The relatives are under no obligation to require repayment, are they?</p>
<p>Or, the repayment terms can be something like a dollar a year. Would that work?</p>
<p>@Scott I’ve got an 830 credit score…</p>
<p>@mom2 wouldn’t that me any other untaxed income again?</p>
<p>Jason, borrowed money isn’t considered income.</p>