<p>My son's dad passed away ten years ago and my son was beneficiary on his life insurance. The amount of money left in the account is probably enough to pay for 2 1/2 years of tuition and expenses (he wants to go to UM). I earn over $110K.</p>
<p>He's a hs junior so we haven't started looking into the whole FAFSA topic yet, but I'm wondering if he will qualify for any FA at all, based on the money he has in his name.</p>
<p>We're pretty sure he'll get merit money offers from the safety schools on his list, but not a guarantee from UM.</p>
<p>Any thoughts on this?</p>
<p>We had a somewhat similar situation–however, the money came from a grandparent. It was invested in the student’s name. When we did the FAFSA calculator, we had an EFC of around 35,000 I think. However, at the more elite schools our D applied to, they assessed her as having no need at all, despite cost of attendance in the 55k range. I think that was partly because I am a business owner, and partly because she had large assets for a student. We wondered how that would change after her money was gone–wondered if she might get some aid then. But we didn’t want to count on her getting aid for Jr/Sr year, so we went the merit route at an OOS flagship, and she won’t need any loans. </p>
<p>So I recommend that you find a FAFSA calculator and run the numbers, to get a baseline idea. I am pretty certain your son will not qualify for any need-based aid. At your income level, it is doubtful he would qualify for much, if any, even after son’s funds are gone.</p>
<p>One thing I wonder about–does anyone know if it possible or even a good idea for mavitale to explore moving son’s funds into a 529?</p>
<p>The money sitting in your son’s name will be assessed at a higher rate 20% by FAFSA than it would be sitting in your account under your name (5.6 after some allowances). So, you would have more flexibility if he paid you for his expenses this year, and you stashed the money on his behalf as YOUR contribution to the college. It gives you more possibilities. Parental 529s for a kid are assessed at the same 5.6% by FAFSA I believe, but some private schools using their own apps and/or PROFILE might look at that differently.</p>
<p>If OP is going to do something, now is the time to do it.</p>
<p>*
My son’s dad passed away ten years ago and my son was beneficiary on his life insurance. The amount of money left in the account is probably enough to pay for 2 1/2 years of tuition and expenses (he wants to go to UM). I earn over $110K.</p>
<p>He’s a hs junior so we haven’t started looking into the whole FAFSA topic yet, but I’m wondering if he will qualify for any FA at all, based on the money he has in his name.</p>
<p>We’re pretty sure he’ll get merit money offers from the safety schools on his list, but not a guarantee from UM.*</p>
<p>Is UM Michigan? Is he instate?</p>
<p>Anyway…no, it’s not likely that he’d get need-based aid from any schools. With your income and his assets, it’s unlikely he’d qualify.</p>
<p>Even if he didn’t have any assets, your income is likely too high for any need based aid to UMich or most state schools. </p>
<p>If your family consists of you and him, then with your income alone, your EFC would be probably about $30k.</p>
<p>Instead of using FAFSA calculators, I would recommend using net price calculators. FAFSA calculators are too misleading since EFC is meaningless at most schools once you’re beyond Pell awards…which you are. Most schools don’t meet need so an EFC of - say $25k - doesn’t mean that you’d get free money at a school that costs $50k.</p>
<p>You need to understand that FAFSA is a federal application for aid. Free aid from the feds is for LOW INCOME people only. You won’t qualify for any free federal money.</p>
<p>Here’s the tricky part: the money was SUPPOSED to be left to me in trust for my son. Instead, his dad was ill-advised and he left the money directly to my (then 8 year old) child. So the money has been locked up in a joint guardianship account with the Surrogate’s Court, and we have to go through an elaborate petition process to gain access to the money at all until my son turns 18 (next January).</p>
<p>At that point I suppose he could give the money to me if that would help. </p>
<p>I’m not a financial wizard by any stretch, so this stuff sets my hair on fire. I’ll talk to the bank to see if they have any suggestions as well.</p>
<p>No, University of Miami.</p>
<p>And yes, our family is just the two of us (I have a 26-year old daughter who does not live at home but who is not quite self-supporting either.).</p>
<p>My income seems high but in relation to my expenses (mortgage, medical expenses for myself, my son and my daughter who has narcolepsy) it is a challenge.</p>
<p>Even if your son gives you the money when he turns 18, your income is too high for need based “free money” at most schools…especially schools that don’t meet need or give great aid.</p>
<p>My income seems high but in relation to my expenses (mortgage, medical expenses for myself, my son and my daughter who has narcolepsy) it is a challenge.</p>
<p>How much can you pay each year?</p>
<p>schools don’t care about mortgages. uncovered med expenses might make some difference, but not dollar for dollar. I don’t think they will count any med expenses for your D since that might be considered optional on your part.</p>
<p>forget about FAFSA…run the NPC on UM’s website.</p>
<p>Thanks for the info. Looks like he’d qualify for the Dickinson Scholarship but no need-based aid.</p>
<p>For your state school, it is pretty much certain, unless you have some extraordinary circumstance that your son won’t get aid. However, for some private schools, he may be eligible for some money. You need to complete the FAFSA anyways in order to get access to Stafford moneys and PLUS for yourself if you choose to borrow. Also some merit awards require the FAFSA even if need isn’t taken into account.
University of Miami is private school, so unless you are referring to Miami of OH or other public school, it is a private school with a sticker price nearing $60K that he is eyeing. It would ask for a PROFILE as well so you might want to run those numbers, if that is the case. And at those prices, your son may qualify for some aid, or loan subsidies and the money in his name will definitely make a difference.</p>
<p>We’re pretty sure he’ll get merit money offers from the safety schools on his list, but not a guarantee from UM.</p>
<p>Be sure to have some of those in your pocket just in case UM isn’t affordable.</p>
<p>Also, he can’t give more than $12K to you in one year without your paying gift tax.</p>
<p>The gift tax situation is one that can be worked out. He can be paying his share of household expenses or paying for his college apps and other directed expenses. The OP should talk to an accountant, however.</p>
<p>Yes, but she’s talking about getting a Lump sum out of his name.</p>
<p>I agree that if he is in state for UMiami, he is not going to get any free money, whether or not he keeps the money in his own account. Mom’s $110k income has to yield an EFC greater than the COA … I get $26k for mom alone.</p>
<p>I think the OP is referring to University of Miami in Florida which is a private school. The COA is probably well over $50K, so there is room for financial aid, depending on assets, particularly the one in the student’s name. I don’'t know what % of need UM tends to meet. THey do have some great merit awards but the stats would have to be very good to qualify. If they are in state Florida, Bright Futures would kick some money as well, though a drop compared to the private school cost.</p>
<p>The annual gift tax exclusion is $13,000. </p>
<p>It’s not necessary for the son to gift his cash to his mother. Just use the money this year for any legitimate expenses that are for the benefit of the son (computer? car?) using the petition process. Then as soon as he turns 18 in January, take control of the funds and move as much as practical into a child-owned 529. After you’ve done that, you can file FAFSA. The funds in the 529 will be assessed at the parent rate of 5.6% rather than the child rate of 20%.</p>
<p>Don’t move more into the 529 than you expect to be used to pay for college.</p>
<p>How much money are we talking about here anyway?</p>
<p>Just use the money this year for any legitimate expenses that are for the benefit of the son (computer? car</p>
<p>I think the amount is 6 figures…too much to just buy a car with.<br>
And, the child doesn’t have access to the money til next year.</p>
<p>Anyway…in a one parent family with one child and that income, “family contribution” is going to be very high even without that asset. EFC is always higher for those with just one parent and one child. </p>
<p>The mom has already indicated that the child will likely qualify for some merit. That alone will cover need. If not, a loan would cover the rest. There wouldn’t be any “need based grants” awarded.</p>
<p>Thanks for all the input here. I have a 529 set up, and the court says I don’t need a petition to move the money (or part of the money) as long as I have a bond (which I do). </p>
<p>My plan would be to move $100K into the 529 right away as the money has been sitting in a joint savings account for 8 years earning .01% interest and keep the rest (about $50K) liquid for expenses this year. </p>
<p>His scores are such that he MIGHT qualify for merit at the U of Miami, but if he doesn’t get in there he would qualify for more than a little merit at the other schools he’s applying to, possibly full rides at some.</p>
<p>It’s just hard to know what to do and when to do it.</p>