<p>M2CK, proceeds from student aid are literally excluded from FAFSA…it doesn’t matter that the money is sitting in checking or savings or under the mattress. That money is simply not reported, which makes sense if you think about it. If the family qualifies for the simplified EFC formulas the student’s assets are excluded, along with the parent’s. Parental equity in their primary home is always excluded for FAFSA.</p>
<p>Unless I am missing something…how do “proceeds from student aid” end up in a kid’s bank account and not applied to his school bill? If received from the school its a bookeeping entry as a credit to the bill, not “cash in pocket”…</p>
<p>Did he receive $10K in private scholarships payable to him and not the school?</p>
<p>Perilous, many students receive more in financial aid (including loans) than their school actually bills for. Especially true if the student is living off campus…COA is much higher than billable tuition and fees!</p>
<p>Just to be clear SK8, I help many families who struggle to figure out how to pay for college and my “bias” here is someone may be gaming the system for personal advantage…i said “may”!!
I understand that someone may have more aid than billed…but $10K in excess “scholarship aid”??? College scholarship money is generally not provided for non-billable expenses (such as books, personal expenses, etc.)…now, if he took this free money to be used to live “off campus” and somehow didn’t spend it for that purpose…that’s certainly possible. Just the notion that someone has a $79 EFC (simplified would be $0 by the way…), but has $10K for a downpayment for real estate while in college just doesn’t add up to me…</p>
<p>Now if the family took extra college loans (up to the COA) to create this pot of money to buy real estate – is that what the loans were designed for?</p>
<p>To each his own I guess…</p>
<p>How is putting a $10K downpayment on a house gaming the system when he would otherwise be paying that $10K in room/board fees and have nothing to show for it after a year? There is an allowance for housing in COA and I’m not aware of any school that stipulates that housing must be rented rather than owned. Nothing in his posts indicates that he obtained this money fraudulently and he specifically stated that he has saved for a number of years and received a $3K refund on his scholarship, which certainly would have been within the COA allowance for his school. </p>
<p>Simplified means only ignores assets, not income, so there is no guarantee of a 0 EFC unless the family meets the criteria for Auto 0, which this family apparently didn’t. Students do have income protection and tax allowances each year and it’s entirely possible for a kid to save $7K over a few years without affecting his EFC if assets are excluded. Work study income is reported but not assessed for FAFSA so, if any of those earnings were from the college, they would not affect EFC either.</p>
<p>Not clear why you think that credits remain on the school’s account (a student only needs to request the funds to receive a check) or that scholarship money cannot be used in excess of billable expenses, but that would only apply to scholarships that stipulate they can be used for tuition/fees only. My kids regularly get scholarships that are used to pay for non-billables and any extra gets set aside for future expenses. None have had any restrictions other than the typical “for educational expenses”. I interpret this to mean anything which would normally be included in the school’s total COA…the school is keeping track and isn’t overawarding aid, and all the rules are being followed, so does it really matter to anyone if they choose to spend less and save their refund for the next year when they may come up short? If they were all in the same city, I’d definitely suggest they pool their resources and invest in a house or condo rather than each paying for an apartment/dorm. Call me crazy, but I think that college housing costs are absurd and the OP’s plan is a much more sensible approach. This sounds like a young adult who is determined to rise above the limitations of a low income background.</p>
<p>sk8…to each their own I guess…all of your “facts” about he “could” have a $79 EFC by doing this and doing that are possible, I know that excess money at the school can be taken out and used elsewhere (I lived off campus many moons ago and did it that way…), etc. I guess using the FA system in your words to buys a house because otherwise he would “have nothing to show for it” is where I disagree with you…</p>
<p>I thought getting a college degree was the goal…</p>