<p>Long story short. I'm 26, no prospects, wanting to attend college for engineering. I live by myself. Parents dead. Supporting myself on < $10,000 a year. I have a farm land asset that I inherited from my father that my sibling and I rent out. I receive about $3,000 a year from this. The FAFSA puts this in the investment farm category of the application. The land is paid for and valued at approximately $160,000 total of which around $80,000 is mine. </p>
<p>After filling out the FAFSA, this asset puts me above the threshold for receiving anything but Stafford loans. I was hoping to meet the Federal Pell Grant criteria, or perhaps something else but am unaware of, to ease my burden a little.</p>
<p>My idea is shifting the land asset to my sibling and filling out the 2015 FAFSA with new information to reflect this temporary change of ownership. My question is the legal status of doing this. I DO NOT WANT TO DO ANYTHING ILLEGAL. From all outside interpretation, it will look like my sibling owns the land and I would get extra Federal aid.</p>
<p>It cannot be illegal to give this to your sibling. There might still be some FAFSA ramifications because you owned it during the 2014 tax period and it impacts your 1040.</p>
<p>I am fairly sure that if you live on that property, you would not need to declare it at all. $6000 income per year is pretty low for an investment property, which you also pay federal taxes on. Isn’t there a farmhouse or trailer you can use as your primary residence?</p>
<p>No, I wish there were. I live about 2 miles away. Even if I lived on it though, since I rent it out, wouldn’t it still be the same in the eyes of the government? We used to farm it but then times got tough and machinery was sold. </p>
<p>Just be alert…you will have to do a deed over to your sibling. The land will belong to that person. Is this really worth it for $5730 which is the max Pell Grant? And you get $3000 from the land rental. You need to come up with $2730. </p>
<p>Sorry, but I think your financial reasoning is “off”. Use the rent money, and get a job. Don’t gove up ownership of this asset.</p>
<p>Any potential to either find a job that pays tuition benefits, or find a school that gives grants instead of loans?</p>
<p>The other option is, since you aren’t making much money, to get a job at the engineering school and go there for free (almost - I think you have to pay $100 or less fees per course depending on where it is) because of tuition remission.</p>
<p>I wouldn’t mess around with switching property from half yours to all your sibling’s, then assumedly back again.</p>
<p>In these such cases, where money is given to someone to hold and then give back, if the school gets wind of this, it could be considered fraud. So any contract between you and your brother would have to give him absolute ownership meaning that if he decides not to give you back the property, you are stuck. If your brother should get into trouble, be sued, whatever, the asset is his for the taking, So there are risks in what you are considering doing. Also , he had better have a will drawn up so that if anything happens to him, you get the property. Probably a good idea to do when there are jointly owned assets. </p>
<p>It would not be just a case of “From all outside interpretation, it will look like my sibling owns the land”, but he will indeed own the land with all the drawbacks and advantages of doing so. You can’t have it both ways in these situations. </p>
<p>I think he will need a job regardless. If he no longer gets income from the property, and can get full PELL and the DIrect loan, that’s about $15,000K a year. If he can work and earn and another $5K and if his brother will lend him $3K ayear which would have been his share of the farm income now going to the bro, OP might be able to make a go of it But he risks losing the property if the brother runs into issues.</p>
<p>Or he can try to take a loan out against the farm as well as the Direct loan. What he loses is the PELL and subsidization of some of the direct loan </p>
<p>Depends on what he needs to make this fly. If he can do with a job without playing around with farm ownership, I agree that is the cleanest route.</p>
<p>He can get the direct loan regardless of who owns the property. So that is a given anyway. Add the Direct Loan would be $9000 because he is an independent student. Add to that the $3000 rental income, plus money from a job.</p>
<p>He is only “losing” $2500…because he is getting $3000 in rental income. </p>
<p>To the OP…how much can you continue to earn while you are working?</p>
<p>I would NOT deed this property away. It is an asset. There is NO guarantee that the sibling will deed it back. And you also have no idea whether this property will appreciate in value. Keep it…and find out.</p>
<p>In my opinion, you can make up the difference between the $3000 rental income and $5730 Pell Grant in a different way than deeding away the property.</p>
<p>Has the original poster already ran the net price calculator both ways to make sure that not having the asset will even result in maximum Pell grant? EFC can be tricky, and my understanding was that student assets were hit at a lower percentage than student income.</p>
<p>Thanks for all your replies. I think I’ll just leave the land as is and do it the “clean” way. I was just hoping to get a little extra aid so I could focus a little more on studies than income.</p>