<p>after the official award aid came out just before school year starts, the student's money in bank account increased due to inheritance.
would it affect the aid given for each quarter of the rest of the year?</p>
<p>No. The assets on the day FAFSA is filed are what is important for FA for the whole school year. </p>
<p>The only way current assets would have any impact is if the school had reason to suspect that the original amount reported was incorrect.</p>
<p>thanks for the reply mom,
i got another question…
in this scenario, the parents earn $27,000 a year.
the student has a part time job of 12hr/week of $8 an hour.
the student’s money in the bank exceeds $10,000. would this affect the EFC if this student is to apply for FAFSA again in the 2013-2014 school year?</p>
<p>because i heard that if the parent’s income is under $30,000 a year, the student’s assets would be overlooked, is this info correct?</p>
<p>I think there’s been a change for “ignored assets” for students. I think the income of the parents needs to be around $23k or less now for student assets to be ignored.</p>
<p>hopefully someone here knows that exact info.</p>
<p>Hmmm. There is a lower income threshold for an auto $0 EFC, but i hope someone will post the criteria for the simplified needs test and the income threshold for that.</p>
<p>If the student’s assets end up not being ignored, then it would be best for the student to hold that $10k in the parents acct, otherwise it will significantly raise the EFC.</p>
<p>except that would be fraud</p>
<p>If the student pays something to his/her parents for room and board, or to reimburse them for expenses (gas for trips, car insurance & maintenance, phone bill, etc.) the parents are entitled to do what they want with it. They can even set this money aside for future college or life expenses if they so choose.</p>
<p>To find the current FAFSA formula, run a search for: EFC Formula 2013</p>
<p>That will get you the link. Print out the PDF and run several different financial scenarios to see what works best for you.</p>
<p>
FAFSA Simplified needs test - All assets are excluded from consideration.
- Parent(s) with adjusted gross incomes of $49,999 or less
- Parent(s) have filed, or are eligible to file, an IRS Form 1040A or 1040EZ or are not required to file an income tax return. </p>
<p>Even your parent(s) filed Form 1040, there are a few situations that you may still qualify SNT.
Such as
- Receipt of means-tested Federal benefits in your family
- Parent(s) are dislocated workers</p>
<p>EFC Formula 2013-2014 Is not available yet.</p>
<p>See below for EFC Formula 2012-2013
[IFAP</a> - EFC Formula Guide](<a href=“http://ifap.ed.gov/efcformulaguide/010512EFCFormulaGuide1213.html]IFAP”>http://ifap.ed.gov/efcformulaguide/010512EFCFormulaGuide1213.html)</p>
<p>thank you all for the reply. i will definitely run the EFC formulas</p>
<p>
</p>
<p>just curious but would this be considered fraud? :/</p>
<p>Whifang,</p>
<p>Students have a protected allowance just like their parents do. I think the limit is $6,000. It would not be hard at all for most families to run up a list of expenses that have been incurred in the past year that the student would need to reimburse them for, and there is nothing wrong with a kid tossing a bit of change his/her parents’ way as a gift. Between now and the end of December, a student could easily “spend down” his/her accounts to get the amount of student contribution into a range that works for the family.</p>
<p>The biggest risk that I see in trying to do so, is that unreliable family members might use the expense reimbursements for expenses unrelated to the student’s needs, leaving an even bigger hole for the student to fill out of his/her own earnings.</p>
<p>^^^</p>
<p>Happymom…</p>
<p>students only have a protected amount for EARNINGS…NOT for savings. So, $6k of earnings won’t affect EFC, but if it’s in savings it will.</p>
<p>If the student pays something to his/her parents for room and board, or to reimburse them for expenses (gas for trips, car insurance & maintenance, phone bill, etc.) the parents are entitled to do what they want with it. They can even set this money aside for future college or life expenses if they so choose.</p>
<p>Yes, the student can give his parents the $10k as a “payback” for various expenses the parents incurred on the child’s behalf, and the parents can stick that money in savings, and then use the money for the kid’s college costs.</p>
<p>Frankly, I think the 'student’s savings" calculation needs to change. It totally discourages students from saving. It’s one thing to consider if a kid has $25k in savings, but a few thousand should be protected.</p>
<p>^^^^</p>
<p>Thanks for correcting me on that one! I was on a mobile device and couldn’t take a look at the formula.</p>
<p>Could the reason for expecting such a high percentage of student savings to be available for the EFC be due to the notion that the only reason why students earn (and save) money is to pay for their educations? I guess it’s time to re-read the College Board’s publication on that topic: <a href=“College Board - SAT, AP, College Search and Admission Tools”>College Board - SAT, AP, College Search and Admission Tools;
<p>Yes, the justification seems to be that students’ money should go towards education. However, that’s just not a real expectation. There should be some protected amount so that students can have a few thousand set aside for: broken phone, car repair, broken computer, etc. </p>
<p>I just think it’s bad to encourage kids to spend all their savings…or resort to financial gymnastics by giving it to parents as a “pay back” and then parents holding it for them.</p>
<p>I agree that this is an awful policy. My high school senior will get the money she has earned this year included for FA calculations and then this same money will get included again when her savings are listed.</p>
<p>It seems that they expect families to “resort to financial gymnastics” by double-taxing money this way.</p>
<p>my dad has a small business company and my mom said i should transfer the $10k to the company as “investment”. this should be fine right?</p>
<p>sry to reply so late, i just moved in to my dorm and had to work.</p>
<p>If you legitimately invest the money in your dad’s company, you would list still need to include it as an asset. However, shares of small, privately-held companies are notoriously hard to value. These investments typically decline in value from the initial investment amount since sale of the shares is limited. Thus, your $10k cash might be worth only$6-8k as this investment.</p>
<p>However, if your “investment” means loaning dad $10k for four years to get the money out of your account, then you must list the loan as an asset at face value (plus accrued interest).</p>