<p>Regarding question about "parents' total current balance of cash, savings, and checking accounts"</p>
<p>My family pulled a mortgage 4 or 5 years ago and split the money. My dad invested his half into real estate, but my mom sat on hers as a 'safety net.' Now she is sitting on roughly $62k of borrowed money in checking+CDs. This money is NOT going to be used for my college funding whatsoever.</p>
<p>Do I declare this when answering this question, or does it count as a debt in the net investments box? It's gaining interest, but we are paying more to the bank in interest on the money. It's all idiotic. is this going to screw my aid chances?</p>
<p>Pulled a mortgage? What does that mean? What is the mortgage against?</p>
<p>If the money is in the bank the I am afraid it is an asset for FAFSA.</p>
<p>You can only include the debt (mortgage) if it is against an asset that must be reported on FAFSA. So if it is against your Mom’s primary home then it cannot be reported as the primary home is not a reportable asset. If it is against other real estate then the value of the real estate is reduced by the mortgage debt. But the money itself is still an asset.</p>
<p>It wouldn’t be fair for your mom to be able to sit on this money and not spend it for college and get financial aid instead. Money is money and if you have it, you are supposed to spend it before getting aid.</p>
<p>I was assuming the parent’s were separated based on the money being handled one way by Mom and another by Dad. If not then yes Dad’s real estate is a reportable asset.</p>
<p>okay, a few more facts. by ‘pulling a mortgage’ i meant that our family financed a mortgage against our primary house. also, the properties that my father invested in are all financed, and for the most part underwater. my parents are not separated, but live very separate lives - including finances. my dad wasn’t even aware of the money she had. she has no retirement fund, so she sits on this money in fear of getting laid off.</p>
<p>again, the money she has is technically a debt drawing lesser interest. our family only makes $55k combined and i was hoping to get considerable aid. i really hope this money doesn’t screw me over but it’s starting to feel like it. can it be hid/invested anywhere?</p>
<p>The best place for it was in the primary home. Primary home and retirement accounts (official ones) are protected assets on FAFSA. Money in the bank and in CDs etc are not.</p>
<p>Not for FAFSA (I don’t know how CSS handles it). Parents do have a certain amount of asset protection in FAFSA based on the age of the older parent. So only assets over those amounts affect the FAFSA EFC. Parent assets over the protected allowance affect the EFC by 5.6%.</p>
<p>EFC is the Estimated Family Contribution tht FAFSA produces based on the income/asset/family information you enter into FAFSA. The FAFSA EFC is used to determine your eligibility for federal aid and in some cases for state or institutional aid. If your Dad is 71 then your parents will have a protected asset allowance of $80,000. So unless there are other reportable assets (investments, cash etc) the $60k should not have much impact on the FAFSA EFC.</p>
<p>With a $55k income your EFC may be too high for much in the way of federal grant aid. The main federal grant, The pell, requires a very low EFC of 4617 or less. With a $55k income you may be over that. So grant aid would depend on whether your school offers institutional (their own money) grant aid and/or whether your state offers any for your income level. </p>
<p>CSS is an additional financial aid application certain schools require. Mostly very expensive schools that offer generous institutional aid.</p>
<p>wow, thanks for the awesome reply. as you said before, primary home equity and IRAs do NOT count towards that asset allowance? also, our AGI may be more like $50k. i don’t see how two parents can be making less than that without being in poverty…do most people not qualify for a pell grant? i found a calculator online and it seemed to make our EFC estimated at 5680. </p>
<p>oh, and one more thing. i personally own a property in another state and have about 15k in equity on it…does this count as ‘other assets?’ this number seems to change my EFC a LOT.</p>
<p>Student income and assets has a bigger effect (proportionally) on EFC than does parent income and assets. So, yeah, the property you own would boost the EFC.</p>
<p>i purchased it in 12/08 and it has depreciated since. i have a $75k mortgage against it and it’s worth around $90k. rent is drawing me dead even with the monthly payments. does this mean i have to declare $15k under ‘other investments?’</p>
<p>A lot of people do not qualify for the Pell grant. I believe $50k is about the average annual income in the US, not poverty level. If your EFC is 5000+ you will not be eligible for Federal grants.</p>
<p>Assets in your name will affect the EFC a lot. A student under the age of around 25 or 26 has no asset protection. Student assets affect the EFC by 20% of their value. (unprotected parent assets only affect the EFC by 5.6%).</p>
<p>Have your parents filed their taxes yet? If your parents AGI on their tax return is *less * than $50k you may be eligible for the simplified needs test where assets are ignored. Otherwise your assets will have an impact.</p>
<p>it will end up being very close to $50k. we are having our taxes done on Tuesday and will find out then. my dad estimates that AGI will most likely end up between $48-52k. also, while the property is quit-claimed into my name, the mortgage is co-signed with my father as the primary signee. can that asset be filed under parent?</p>
<p>run the numbers for yourself
your mother could use some of her “loan” money to pay off some of the mortgage, that amount above asset protection.</p>
<p>if you have the equity in your home it does not count against you, if you have it in cash, then it is considered available for use for college costs. But there is a pretty decent amount of protected asset allowance- $80k for an oldest parent above 65 in a two parent home</p>
<p>Your parents may not be eligible for simplified needs as they seem to have some complicated finances. A lot of things can make you ineligible for filing a 1040a or ez (one of the requirements for simplified needs). For instance itemizing deductions on your tax return.</p>
<p>If the property is in your name it is your asset and must be reported as such. Also you say you have rental income that offsets the mortgage? Whose tax return is that reported on?</p>