confused about need-based aid

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imisscollege
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confused about need-based aid

Postby imisscollege » Tue Mar 30, 2010 11:00 am

so my parents have money. they say it's way better to borrow it from them and pay them back (with interest if i go into the private sector, without if i stay public) as I can, than it would be to take any official loans. fine. i consider myself lucky

BUT let's say I had filed my taxes independently this year and became financially "independent," taking maybe a few grand from them for living each year under the table.

Would it have made more sense to do this and fill out need-based stuff which I would likely get because I personally have very little money? Have I forfeited a lot by not doing this?

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Unitas
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Re: confused about need-based aid

Postby Unitas » Tue Mar 30, 2010 11:34 am

imisscollege wrote:so my parents have money. they say it's way better to borrow it from them and pay them back (with interest if i go into the private sector, without if i stay public) as I can, than it would be to take any official loans. fine. i consider myself lucky

BUT let's say I had filed my taxes independently this year and became financially "independent," taking maybe a few grand from them for living each year under the table.

Would it have made more sense to do this and fill out need-based stuff which I would likely get because I personally have very little money? Have I forfeited a lot by not doing this?


You are the reason people like me have to fill out my parents information for need-based aid even though I have not been supported by them in over 10 years... What you suggest is unethical.

I am independent for 10 years, older, with a wife and son, yet STILL have to fill out my parental information.

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BigFatPanda
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Re: confused about need-based aid

Postby BigFatPanda » Tue Mar 30, 2010 11:37 am

imisscollege wrote:so my parents have money. they say it's way better to borrow it from them and pay them back (with interest if i go into the private sector, without if i stay public) as I can, than it would be to take any official loans. fine. i consider myself lucky

BUT let's say I had filed my taxes independently this year and became financially "independent," taking maybe a few grand from them for living each year under the table.

Would it have made more sense to do this and fill out need-based stuff which I would likely get because I personally have very little money? Have I forfeited a lot by not doing this?


Under IRS regulation, you can get up to $12,000 from a parent as a gift without incurring taxable liability. If you have two parents, potentially, you're eligible to receive up to $24,000 as gift without tax liability, irrespective whether you're independent or dependent. Since Gift is not consider taxable income, it will not hurt your need base application. Even @ $24,000, you're consider poverty stricken.

http://www.irs.gov/businesses/small/art ... 39,00.html

If you are someone who regularly gives away large amounts of money or property then it is important for you to be familiar with the gift tax limits. The gift tax limits are set in to place so that your gifts are taxable above a certain amount.

Currently the IRS will allow you to give away up to $12,000.00 annually without having to pay any tax on the gift. This $12,000.00 can be given to one person or any number of people. If you are married then this amount increases to $24,000.00.

One important thing to remember is that the recipients of your gift will never have to pay any tax on the gift.

How Much Can I Give In a Lifetime?

You are allowed to give up to one million dollars in gifts above the annual limit in your lifetime without having to pay taxes. This means you need to plan carefully to ensure you do not exceed your annual limit as well as your lifetime limit.

Why Is There a Gift Tax?

The gift tax was imposed to prevent taxpayers from giving away everything they own before they die to avoid paying estate tax. If you do go beyond the gift tax limit then you could be taxed as high as 45%. So be careful with the amounts you are giving away.

We suggest using an online tax preparation service such as TurboTax Online that will help you calculate the amount you have given away and if you owe any tax on those gifts.
Last edited by BigFatPanda on Tue Mar 30, 2010 11:47 am, edited 1 time in total.

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dutchstriker
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Re: confused about need-based aid

Postby dutchstriker » Tue Mar 30, 2010 11:45 am

imisscollege wrote:so my parents have money. they say it's way better to borrow it from them and pay them back (with interest if i go into the private sector, without if i stay public) as I can, than it would be to take any official loans. fine. i consider myself lucky

BUT let's say I had filed my taxes independently this year and became financially "independent," taking maybe a few grand from them for living each year under the table.

Would it have made more sense to do this and fill out need-based stuff which I would likely get because I personally have very little money? Have I forfeited a lot by not doing this?

You probably haven't lost much of anything. I don't know of any school that doesn't also request very detailed parental information up to the age of around 30. So the fact that they "have money" would have likely prevented you from getting much need-based aid.

09042014
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Re: confused about need-based aid

Postby 09042014 » Tue Mar 30, 2010 11:50 am

imisscollege wrote:so my parents have money. they say it's way better to borrow it from them and pay them back (with interest if i go into the private sector, without if i stay public) as I can, than it would be to take any official loans. fine. i consider myself lucky

BUT let's say I had filed my taxes independently this year and became financially "independent," taking maybe a few grand from them for living each year under the table.

Would it have made more sense to do this and fill out need-based stuff which I would likely get because I personally have very little money? Have I forfeited a lot by not doing this?


1) At most schools need based aid is a myth. (HYS are the known exceptions, Boalt and NYU may considering it)

2) Most schools, especially the ones who actually give need aid, will consider your parents when giving out need aid. So you won't get a dime.

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Core
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Re: confused about need-based aid

Postby Core » Tue Mar 30, 2010 11:56 am

dutchstriker wrote:
imisscollege wrote:so my parents have money. they say it's way better to borrow it from them and pay them back (with interest if i go into the private sector, without if i stay public) as I can, than it would be to take any official loans. fine. i consider myself lucky

BUT let's say I had filed my taxes independently this year and became financially "independent," taking maybe a few grand from them for living each year under the table.

Would it have made more sense to do this and fill out need-based stuff which I would likely get because I personally have very little money? Have I forfeited a lot by not doing this?

You probably haven't lost much of anything. I don't know of any school that doesn't also request very detailed parental information up to the age of around 30. So the fact that they "have money" would have likely prevented you from getting much need-based aid.

+1

yeff
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Re: confused about need-based aid

Postby yeff » Tue Mar 30, 2010 4:39 pm

As others have stated, the need-based aid is for those whose families don't have the resources yours does. Becoming independent for a year or two won't work - they still ask for your parents' info regardless of whether they will be helping.

Having dependents of your own or being over 30 are generally the only ways to avoid this, I believe.

Pearalegal
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Re: confused about need-based aid

Postby Pearalegal » Tue Mar 30, 2010 4:51 pm

Unitas wrote:
You are the reason people like me have to fill out my parents information for need-based aid even though I have not been supported by them in over 10 years... What you suggest is unethical.

I am independent for 10 years, older, with a wife and son, yet STILL have to fill out my parental information.


The reason you have to fill out your parental information is because even people with a lot of personal responsibilites can still be helped out by their parents. If you fall down, there is someone who could presumably help pick you up. Also, its not they're not rich little brats who have been independent for 10 years and have a spouse and child who aren't still having their asses wiped by their parents/inheritance. Come on.

Do you honestly think a financial aid officer is going to look at your tax return and a college senior's tax returns paired with your parent's information in the exact same manner?

imisscollege
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Re: confused about need-based aid

Postby imisscollege » Tue Mar 30, 2010 5:24 pm

from what I understand here, the premise doesn't seem to totally lead to the conclusion

If your parents have money
Then you will have money (from them) for LS and as a result you can't do a need-based grant

Doesn't quite seem to follow

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dutchstriker
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Re: confused about need-based aid

Postby dutchstriker » Tue Mar 30, 2010 6:52 pm

imisscollege wrote:from what I understand here, the premise doesn't seem to totally lead to the conclusion

If your parents have money
Then you will have money (from them) for LS and as a result you can't do a need-based grant

Doesn't quite seem to follow

I definitely can't think of a better system. This seems like the best gauge of your socioeconomic status, which should be the number one factor in determining need-based aid. Besides, most people entering law school are zero to two years out of college, meaning they are in the similar position of not having a high income or a lot of savings.

singingvontrapp
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Re: confused about need-based aid

Postby singingvontrapp » Tue Mar 30, 2010 6:57 pm

yeff wrote:As others have stated, the need-based aid is for those whose families don't have the resources yours does. Becoming independent for a year or two won't work - they still ask for your parents' info regardless of whether they will be helping.

Having dependents of your own or being over 30 are generally the only ways to avoid this, I believe.


Being over 30 doesn't automatically shield you from this, as I found out.

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lostjake
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Re: confused about need-based aid

Postby lostjake » Tue Mar 30, 2010 6:58 pm

Desert Fox wrote:
imisscollege wrote:so my parents have money. they say it's way better to borrow it from them and pay them back (with interest if i go into the private sector, without if i stay public) as I can, than it would be to take any official loans. fine. i consider myself lucky

BUT let's say I had filed my taxes independently this year and became financially "independent," taking maybe a few grand from them for living each year under the table.

Would it have made more sense to do this and fill out need-based stuff which I would likely get because I personally have very little money? Have I forfeited a lot by not doing this?


1) At most schools need based aid is a myth. (HYS are the known exceptions, Boalt and NYU may considering it)
2) Most schools, especially the ones who actually give need aid, will consider your parents when giving out need aid. So you won't get a dime.

+1

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lstwin
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Re: confused about need-based aid

Postby lstwin » Thu Apr 01, 2010 9:40 pm

singingvontrapp wrote:Being over 30 doesn't automatically shield you from this, as I found out.

This.

I will be 30 when I start LS, and I still had to put my parents' financial info on my Need Access form (not the FAFSA though), and as a result of my dad's assets, I am eligible to receive $0 in need-based financial aid. Which is ridiculous, because 1) I've been independent for 7 years, and 2) what do they think my dad is going to do - sell his house to pay for my legal education? :x

/rant

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darknightbegins
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Re: confused about need-based aid

Postby darknightbegins » Sat Apr 03, 2010 3:46 am

Like many have said OP you are fucked. I am in the same situation as you are and my parents do help me out and I wouldn't try to pull a fast one with the need based aid by screwing some other poor SOB over. I don't even try to get need based aid because I already know I am screwed.

KG_CalGuy
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Re: confused about need-based aid

Postby KG_CalGuy » Sat Apr 03, 2010 3:55 am

Need-based aid essentially means are you (or you family) low-income family. If you read this really cynically it ends up being a sort of social-leveling. After all, you might say that I have financial needs since I'll be paying my entire law school education and have hardly any assets. But, since I come from a middle/upper-middle class family I never qualify for "need-based" aid. The assumption is (though the law schools will NEVER admit it): well-off families won't allow their children to drop out of school for financial reasons (therefore they'll pay out of pocket). It sucks, but that's life.

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darknightbegins
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Re: confused about need-based aid

Postby darknightbegins » Sat Apr 03, 2010 4:37 am

KG_CalGuy wrote:Need-based aid essentially means are you (or you family) low-income family. If you read this really cynically it ends up being a sort of social-leveling. After all, you might say that I have financial needs since I'll be paying my entire law school education and have hardly any assets. But, since I come from a middle/upper-middle class family I never qualify for "need-based" aid. The assumption is (though the law schools will NEVER admit it): well-off families won't allow their children to drop out of school for financial reasons (therefore they'll pay out of pocket). It sucks, but that's life.


Pretty much. However, personally, I am more comfortable with this than affirmative action. Financial disadvantage is something that can be easily quantified and measured, the disadvantage one is at because they are of a particular race is more difficult to quantify.

14yearplan
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Re: confused about need-based aid

Postby 14yearplan » Sun Apr 04, 2010 3:52 pm

lstwin wrote:
singingvontrapp wrote:Being over 30 doesn't automatically shield you from this, as I found out.

This.

I will be 30 when I start LS, and I still had to put my parents' financial info on my Need Access form (not the FAFSA though), and as a result of my dad's assets, I am eligible to receive $0 in need-based financial aid. Which is ridiculous, because 1) I've been independent for 7 years, and 2) what do they think my dad is going to do - sell his house to pay for my legal education? :x

/rant


FYI

I am over 30, and I called a bunch of law schools to ask if I really needed to put my parents' info on Need Access and I was told not to--even though Need Access says it's necessary. No school has questioned this, nor have they asked me for my parents' info. My parents don't have anything, so if asked, I think it could only help my situation; however, the facts that I am married with a child, and have not been dependent on my parents for over 13 years makes me believe that it is just illogical that their finances should be brought into the equation at all.

Those over 30 (and married) who have been asked by a school for their parents' info, please share what schools.

If you just put their info into Need Access because it said it was necessary,and it is affecting your aid, I strongly advise that you amend your Need Access application, remove your parents' information, and contact the schools and let them know.

eros
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Re: confused about need-based aid

Postby eros » Sun Apr 04, 2010 4:01 pm

Actually once you turn 24 I think it is, you are considered to be independent by FAFSA automatically and thus do not have to answer any info about your parents...

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Blindmelon
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Re: confused about need-based aid

Postby Blindmelon » Sun Apr 04, 2010 4:06 pm

Desert Fox wrote:
imisscollege wrote:so my parents have money. they say it's way better to borrow it from them and pay them back (with interest if i go into the private sector, without if i stay public) as I can, than it would be to take any official loans. fine. i consider myself lucky

BUT let's say I had filed my taxes independently this year and became financially "independent," taking maybe a few grand from them for living each year under the table.

Would it have made more sense to do this and fill out need-based stuff which I would likely get because I personally have very little money? Have I forfeited a lot by not doing this?


1) At most schools need based aid is a myth. (HYS are the known exceptions, Boalt and NYU may considering it)

2) Most schools, especially the ones who actually give need aid, will consider your parents when giving out need aid. So you won't get a dime.


Not true - below median #s got me 20k/year at BU. You and your parents have to be really poor though. My parent's income is 0 and I paid my way through UG and came out with 35k of debt. If your parents are middle class, i.e. make > 60kish then I doubt you'd get anything.

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legalease9
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Re: confused about need-based aid

Postby legalease9 » Sun Apr 04, 2010 4:11 pm

darknightbegins wrote:Like many have said OP you are fucked. I am in the same situation as you are and my parents do help me out and I wouldn't try to pull a fast one with the need based aid by screwing some other poor SOB over. I don't even try to get need based aid because I already know I am screwed.


I say ALWAYS apply for need based aid. You may get nothing, but most schools do the (need and merit combined) awards, and neglecting to provide financial info could effect that.

P.S. OP, Both FAFSA and Need access ask for cash support information. So you have to report the "cash under the table" you may receive, even if its not taxable.

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evilgenius
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Re: confused about need-based aid

Postby evilgenius » Sun Apr 04, 2010 5:09 pm

Blindmelon wrote:
Desert Fox wrote:
imisscollege wrote:so my parents have money. they say it's way better to borrow it from them and pay them back (with interest if i go into the private sector, without if i stay public) as I can, than it would be to take any official loans. fine. i consider myself lucky

BUT let's say I had filed my taxes independently this year and became financially "independent," taking maybe a few grand from them for living each year under the table.

Would it have made more sense to do this and fill out need-based stuff which I would likely get because I personally have very little money? Have I forfeited a lot by not doing this?


1) At most schools need based aid is a myth. (HYS are the known exceptions, Boalt and NYU may considering it)

2) Most schools, especially the ones who actually give need aid, will consider your parents when giving out need aid. So you won't get a dime.


Not true - below median #s got me 20k/year at BU. You and your parents have to be really poor though. My parent's income is 0 and I paid my way through UG and came out with 35k of debt. If your parents are middle class, i.e. make > 60kish then I doubt you'd get anything.


+1. I also received need based grants. Both Cardozo and Brooklyn Law School give need grants based on your's and/or your parent's income. There probably aren't too many schools that give them but some schools (like Cardozo) don't publicize the availability of these funds. It's always worth asking.

But IMO I think that you really don't need a need based grant if your parents can afford to pay your COA. In most cases these programs are meant for people from underprivileged backgrounds that wouldnt be able to attend law school otherwise - it doesn't seem as though you fit that profile.

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j.wellington
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Re: confused about need-based aid

Postby j.wellington » Mon Apr 05, 2010 11:29 am

evilgenius wrote:
Blindmelon wrote:
Desert Fox wrote:
imisscollege wrote:so my parents have money. they say it's way better to borrow it from them and pay them back (with interest if i go into the private sector, without if i stay public) as I can, than it would be to take any official loans. fine. i consider myself lucky

BUT let's say I had filed my taxes independently this year and became financially "independent," taking maybe a few grand from them for living each year under the table.

Would it have made more sense to do this and fill out need-based stuff which I would likely get because I personally have very little money? Have I forfeited a lot by not doing this?


1) At most schools need based aid is a myth. (HYS are the known exceptions, Boalt and NYU may considering it)

2) Most schools, especially the ones who actually give need aid, will consider your parents when giving out need aid. So you won't get a dime.


Not true - below median #s got me 20k/year at BU. You and your parents have to be really poor though. My parent's income is 0 and I paid my way through UG and came out with 35k of debt. If your parents are middle class, i.e. make > 60kish then I doubt you'd get anything.


+1. I also received need based grants. Both Cardozo and Brooklyn Law School give need grants based on your's and/or your parent's income. There probably aren't too many schools that give them but some schools (like Cardozo) don't publicize the availability of these funds. It's always worth asking.

But IMO I think that you really don't need a need based grant if your parents can afford to pay your COA. In most cases these programs are meant for people from underprivileged backgrounds that wouldnt be able to attend law school otherwise - it doesn't seem as though you fit that profile.


I've heard that, despite what the name implies, "merit scholarships" at many schools are awarded with some consideration to financial need, at least informally. In other words, if two applicants have similar stats but one is wealthy and the other reasonably poor, the poorer student is more likely to get a heftier scholarship.




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