@BelknapPoint @austinmshauri
It’s confusing, I understand. Without going into too much detail here, it’s the result of a settlement and technically I don’t have direct access to it, and it’s not in my name, but was established to pay for my education.
Like a Trust? Trusts of which the student is a beneficiary must be reported on FAFSA as a student asset, even if the student does not have “direct access” to the Trust. If it was established to pay for your education, then it is for your benefit, regardless of who’s name it’s in.
I’m not trying to say you’ve done anything wrong here; I’m genuinely curious about the legal structure that allows for this asset not to be reported on financial aid forms.
Also, if this asset was established to pay for your education, I don’t think that undergraduate programs will care that you want to save it for graduate school. They will see it clearly for what it is, and ask why they should spend scarce institutional funds on you when you have this pot of money sitting there that’s supposed to do exactly what you are asking someone else to pay for.
Wanting to save money for law school will not get you any more aid for undergrad. It sounds like you are trying to hide money to get more aid. You already have full tuition and a bit more. Northeastern will not give you more.
Yes, if you are the beneficiary of a trust, you have to report that. My kids did.
I think this might be a structured settlement pursuant to litigation or an insurance payout. I’m not sure how those are meant to be reported on financial aid.
Wow. NMF is only worth $22K out of a $60K price at NEU. I think that was full tuition not that long ago.
Perhaps, but without clarification from the OP, we don’t know.
Structured settlements are generally considered not to be taxable income under the tax code, and I don’t believe that either FAFSA or Profile requires them to be reported as nontaxable income. However, unless a structured settlement is set up as a whole life insurance policy or a non-qualified annuity, I believe that it should be reported as an asset on FAFSA, as long as the student or a custodian acting for a student beneficiary has access to the funds. And presumably, OP has access to the funds, either directly or through a fiduciary, because OP said that they are designated to pay for OP’s education. The whole life insurance and non-qualified annuity exceptions do not apply to the Profile, which OP has filed.
A settlement would be categorized by the agreement. Pain and Suffering is not income but lost wages would be unearned income. That’s why it’s important to have a tax expert in on the settlement deal. Both could be an asset if in an account.
I agree that even without this account, the possibility of NEU reconsidering is low. It’s already a very good package, probably already based on father’s rather low previous income of $55k. The question may be would there really have been more aid if the lower 2016 income had been used? Maybe not.
Alright - I am by no means a tax expert, so forgive me if I say anything wrong here. We’ve met with a tax attorney and the accountant who does the taxes, and both have said that it should not play into any financial aid forms. I’m not exactly sure of their reasoning, but I do know that it is not a trust and not an insurance settlement. It was the result of litigation.
Regardless of what it is, I realize that I’m very fortunate to have it and I’m trying to act as such while conserving at the same time. I wanted to thank you all for your help on my original question about contacting financial aid offices. I understand it might be hard to get Northeastern to reconsider, so hopefully I will have more luck with the schools that I have not received decisions/packages from yet.
@“Erin’s Dad” I believe it is actually “up to $30K” and I think I was awarded $22k/year in anticipation that they would bump it up to the full NMF scholarship. But yes, it’s still a significant chunk less than it used to be.
What’s the “it” here? What kind of financial arrangement are you talking about? I have trouble believing that if there are funds currently available specifically for your use, that they can be properly excluded as a reportable asset from both FAFSA and the more detailed Profile. I think there are some on this forum, myself included, who would like to know the answer for our own knowledge base and for our own use, if indeed there is a legitimate way to shield such currently available funds.
I’ll be honest - going over all of this last fall when I was trying to figure out financial aid forms was pretty much like listening to a foreign language. I’m not sure what type of structured account it is or why it is excluded. Also, technically, the funds aren’t “currently available” but will be August 1.
But - that said, I will see if I can find out and get back to you all.
@BelknapPoint I am almost positive this is a structured settlement. They are (usually) annual payouts done in lieu of lump sum payout pursuant to litigation (usually some sort of tort or personal injury, but it’s also used in employment litigation). The person who receives the structured settlement can set up all or part of it for educational purposes for a child. I have no idea about how they relate to financial aid asset disclosure. I always assumed it was similar to a 529 or something, but I have no personal experience.
In that case, it may be proper not to report on the 2016-2017 FAFSA, but I would think that future FAFSA filings would require it (unless the whole life or non-qualified annuity exception applies). On the other hand, Profile does ask about expected resources for the coming year:
*Student’s Expected Resources for 2016-17 (SR)
SR-165A
Enter the total amount you expect to receive from your relatives and all other sources. (List sources and amounts in Explanations/Special Circumstances (ES).)*
I guess I’m glad that I’ve sparked some sort of interesting discussion about financial disclosure. I didn’t know there was such a thing.
Oh, yeah. You need to hang around here more! 
You should also be aware, whitespace, that the insurance guy and the lawyer and the tax man are not always up to date on student aid financial requirements. If they don’t have children in college, applying for aid, they have no idea what the questions are or if the money receive is reportable. It not a common thing for accountants to fill out FAFSA of CSS forms. When they say ‘you should be alright’ that’s not reliable.
You are the one who has to sign the fafsa forms certifying all information is correct, not them. There is a credit available for adoption expenses and for years the parents knew much more about it than any cpa. TurboTax had it wrong for a few years. It’s just not common enough for tax preparers to run into all the time. Your situation sounds the same. Listen to the advice, but make sure you understand the settlement before you sign the fafsa next year.
I usually try to avoid these types of threads, just because I start reading and end up more confused than I started. But it’s all good info to know.
@twoinanddone Very good points. I will make sure stay aware of everything I can.
So your risk is that while you didn’t have to report it this year, you likely WILL be required to next year. And it will reduce your FA. If you are being honest on your financial aid forms, that is what will happen.
OP, it sounds like you have been through a lot- read your other posts. Anyways, be careful here. Should your fin aid decrease because of a windfall then you need to understand how that will impact you. You stated that the windfall would be enough to cover future educational costs and buy a house. But you also have a mother who is severely disabled and likely to need home health or institutional care especially as she ages. That eats up a lot of money quickly. I would be careful to earmark those funds as yours to pay for grad/law school and purchase a home. Just be prudent and don’t get carried away with having to go to any one school or plan. Getting an education without going into debt is in itself a great thing that will not hold you back.