rules for reporting gifts to financial aid

Does anyone know the current rules on this?
Does one have to report graduation gifts (money already spent)? Birthday gifts? Items in care packages?
My nephew recently had his work study removed because he received a small outside scholarship. I want to help him out but I don’t want to diminish his financial aid further, because he really needs it. Can I buy his books or is that supposed to be reported, too? I assume any money I send just to help him out would have to be reported, right?
I know there have been other threads on this but I’d like current info.
Thanks

A student who files FAFSA is required to report “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 or other person whose financial information is not reported on this form and that is not part of a legal child support agreement.”

What year in collge is your nephew? With the relatively new prior-prior year reporting process, any gift received in 2017 would not need to be reported on FAFSA until the form is completed for the 2019-2020 academic year. A gift received in 2018 whould be reported on the 2020-2021 FAFSA.

He is a freshman right now.

What about if I send him like laundry detergent and toiletries? Is he supposed to add up the cost and report it?

Under the FAFSA language that I quoted in my post #1 above, no. Giving your nephew laundry detergent and toiletries is not the same thing as giving him money or paying a bill for him.

Thanks!

Question: If money is already reported because it is an asset in a student’s bank account, then the gift wouldn’t have to be reported again - correct?

Scholarships have to be reported, even if they are $100. Gifts from relatives in the normal course of life? I don’t think anyone, at any school, expects you to report dinners or care packages or vacations a relative provides.

You can also stay inside the rules by giving the money to one of this parents and they can pass it on. I wouldn’t bother to do that, but if you feel guilty giving it directly to him, that he’d feel the need to report $50 from Aunt Sue on the FAFSA for next year, do it that way.

You can indirectly gift your nephew if you can trust his parent. You’d gift the parent who agrees to use the money for school items

There is no requirement to report stuff like this. Cold hard cash, either gifted directly to the student or used to pay a bill in the student’s name, is a different matter. And I don’t think too many people are worried about small amounts like a $50 bill stuck in a birthday card.

I’ve said this before and I’ll say it again – a gift with strings attached is not a gift in the legal sense. In my opinion, what you’re describing would be considered a gift to the nephew, if it’s channeled through the parents with the expectation or requirement that it be used for the benefit of the nephew.

Really, I wasn’t about to report the $50 grandma gave. You have to try to understand the intent behind the questions. Other than the outside scholarship issue, they’re referring to amounts that they don’t need to give in aid (assuming the school is generous,) because someone already is covering that.

If you’re paying $800 for books, that’s one thing. This isn’t meant to track, say, the gas money you gave. And laundry supplies or care pkgs aren’t “money” paid on his behalf, for a bill.

So you think a cash gift of $100 should, by the rules, be reported but dinner every Sunday isn’t reportable as ‘support’? My friend’s niece ate at her house every Sunday for 4 years and did her laundry while there. IMO, this is much more ‘support’ than the $100 gift or buying books as far as the question of ‘support you have received from others.’ What if she’d let her niece live with her for all 4 years?

But I wouldn’t report either, the dinners or the money. Or the vacation paid for by grandparents that might be worth $1000. Or the occasional babysitting money. I don’t think most parents report their escrow accounts on their mortgages even if they are overfunded by a couple of thousand $$, or coin collections, or even the $200 in their wallets on the day FAFSA is filed. Do parents even remember that they have a $200 dorm deposit just sitting there for 4 years and include it as a cash asset?

If she’d lived with her, that would eliminate housing costs the school might grant. (Just saying.) Yes, that would be reflected in FA forms.

But the rest is not what the school is looking for. Go ahead and buy him a few books, have them sent to him. Give him a gift card worth whatever. But if you pay something they account for in FA decisions (say, his health insurance bill,) that’s different. Afaiac, “paid on your behalf (e.g., bills)” really means bills. Or large ticket items.

Don’t make this more complicated than it needs to be (and it’s not very complicated). The FAFSA language doesn’t use the word “support.” It specifically refers to money received by the student or paid on the student’s behalf. Not a meal (or vacation) provided, not laundry detergent, not a care package – money. And I’m pretty sure that the idea isn’t to require that every little de minimis cash gift be reported. Let your own conscience and sense of fair play determine at what dollar level a cash gift or paid bill should be reported on FA forms.

https://fafsa.ed.gov/fotw1718/help/totalMoneyReceived.htm

https://ifap.ed.gov/efcformulaguide/attachments/111609EFCFormulaGuide20102011.pdf

Look through the FAFSA EFC formula (student worksheet on page 10), I think the “money paid on behalf” of a student is reported in question 45j, which is part of student income information.

Student income is subject to an income protection amount, so unless student earned over $6420, the gift might not matter.