Utter stupidity is reigning supreme at my house...can y'all help me?? (re: health insurance)

Crying with you all. This is a beautiful thing to do, Sugar Plum Fairy. You are an inspiration.

You are typing through tears and we are all reading through tears. So happy for you and your D, what a wonderful end to a stressful story!

Wow. How awesome! I followed the thread, and am so happy for your family! Faith in mankind restored! : )

Adding my cheers and smiles and thanks to the incredible Sugar Plum Fairy and to the OP’s daughter, all the best of luck, and to the OP, you are a great mom.

Sugar Plum Fairy, whoever you are, if you are still reading this thread- your generosity is an inspiration to all of us. May you and your own family know only kindness and goodness, with many reasons to celebrate.

OP- your D will do great things in life because she is standing on the shoulders of giants- the ones she knows, and the ones who are anonymous.

thank you for updating us. We are rooting for your family!

Tears here also. I wish all the best for your daughter!

Sugar Plum Fairy, you are truly one of the best, and an inspiration to all. Thank you for reminding us all that goodness still exists in this world!

@BelknapPoint if this family received a check for $13,000 or so this year…will this need to be accounted for in the 2021-2022 FAFSA? If so, how?

Just thinking that if yes, they need to plan ahead.

Would it be better to pay it directly to the school to avoid what’s posted by thumper1?
Very generous of someone on CC. Kudos to you.

Does this money count as income?

Hoping @BelknapPoint can clarify how this money given to the family in 2019 will or won’t need to be reported on the 2021-2022 FAFSA form.

No, not income. it is a gift to the parent and the parent is allow to pay for insurance to for the child.

If $10k is sitting in a bank account next time FAFSA is filed, it is an asset but it may be covered by the asset protection allowance if in the parent’s bank account.

@twoinanddone I know it’s not income…but is there someplace on the FAFSA for this money in subsequent years? For some reason, I think there is.

Student gift money should be reported on Fafsa as other income. A gift to parents would work like @twoinanddone detailed.

@twoinanddone and @mwfan1921, it was made out to the parents and we will be using it just for her insurance each year. Can you explain to me what the asset protection allowance is, please? (I don’t want to compound my mistakes already made this year but messing this wonderful gift up)

There is an asset protection allowance on the FAFSA. Assets below the amount are not considered in the financial aid formula. Parent assets above the amount are assessed at 5.6% or so of their value and that amount is added to the family contribution.

The asset protection allowance isn’t all that high…maybe $35,000 or so…someone else can clarify this.

So…if you have assets like real estate in addition to your primary residence, savings, etc…those would count. You mention you are self employed…I’m not sure how your business assets count on the FAFSA…they might not.

Remember also, as mentioned upstream…if any of your daughter’s financial aid (not loans) is used for room, board, personal expenses, that amount could end up being taxable income for her.

@thumper1, we don’t have any real estate or anything like that so maybe it will be okay.

And her scholarship was just for tuition so maybe we are okay there, too. Thanks for the info.

Amazing how complicated this can get.

In terms of IRS taxes: In 2018, a gift of $15,000 or less in a calendar year doesn’t need to be reported for IRS tax purposes (from one person to another). $15k can be given from each donor to each recipient (mother, father, child). So there is room for much more to be donated without an issue for taxes (and the donor usually pays the gift tax anyway).

This Schwab article describes it (with 2016 numbers):
https://www.schwab.com/resource-center/insights/content/tax-free-gift-limits-how-much-money-can-you-give

In terms of asset protection allowance, you can find the 2017-2018 numbers here:
https://studentaid.ed.gov/sa/sites/default/files/2017-18-efc-formula.pdf

Find table B4 (for the child) and B5 (for the parents). The parent’s table depends on how much in assets you can have depends on the age of the older parent. For FAFSA, Retirement assets and home equity are not asked about and do not count. Note that FAFSA, when calculating the EFC, looks at savings held by parents differently then that for children. It will count the children’s savings at a higher percent than the parents savings. So if the savings amount exceeds the numbers in the tables for both parents and child, it would be better to make the gift to the parents as opposed to the child because FAFSA will count the excess (over the limit) at a higher rate for the child and reduce the scholarship accordingly.

However, it is different for the CSS where SOME schools include Home Equity when calculating the scholarship (but still not retirement assets). I believe all schools use the FASFA, but not all schools use the CSS when calculating scholarship benefit. My understanding is that public schools do not, but many private schools do (most all the selective ones we applied to). Some have their own financial aid questionnaires.

I’m certain this has already been mentioned… but I would borrow the money (yes, it is a kick the can down the road mentality) to buy the Agnes Scott policy and then hope that she can get extra work study or maybe even an extra summer job that will help cover it/pay it. Consider having her find something that pays better than the waitress - maybe a full-time nanny position, dog walker, house sitter for people vacationing… anything else she can add. Any college she would have gotten into or could still apply to out of state you will have the same problem. Plus ATL is a thriving ever changing city… much more urban than southern (I have family that live there and have visited it for over 40 years - I’ve watched it grow and morph). If she was hoping to ‘get out of the south’ it is about as far as you can go without actually leaving! Great ethic restaurants, vibrant art scene, great concerts … and of course sports which will not interest her probably but it adds to the city’s personality. Also AS is a GREAT school! I was in my top 3 ‘back in the day’ and although I haven’t really kept up with it’s growth, I’m certain being where it is in Atlanta, Scott has maintained it’s ability to turn out fantastic women leaders.

@ASKMother Plesse read the thread.

I’m not crying… no, really, it’s just the pollen has kicked up my allergies…