FAFSA Help!

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
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hokie
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Joined: Tue Jun 15, 2010 1:32 am

FAFSA Help!

Postby hokie » Sat Feb 26, 2011 1:54 am

So I am fairly new to the FAFSA process and have a few questions:

1) Although I am completely independent and file my own taxes, my dad could technically claim me as a dependent when I enter law school (under 25+grad student, etc). When choosing which parent's info I should put it (my parents are separated), do I have to put my dad's or just put my mom's (which would be x1000 easier because she doesn't work)?

2) Long story short, I am "holding" a sizable sum of money for an immediate family member who has closed all of their bank accounts because they are out of the country doing mission work. I currently possess this money in my savings account so I am afraid that it will considerable hurt my chances for grants and loans (the sum is in between 40-70K but I myself am a average poor working man). Any thoughts on whether it will drastically hurt my chances and what I should do or am I SOL?

3) Lastly, I am in the process of filing my taxes but have not completed them and for the life of me I cannot find any information on how to figure out how much "income tax" I have (it referenced line 35 on 1040A and I cannot go off of my 2009 tax figures as my income was drastically different in 2010). As my luck goes, my friend (who is doing my taxes) is currently on vacation with no cellphone and will not return for another week. Any thoughts?

Thank you all in advance for your help!

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Eugenie Danglars
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Re: FAFSA Help!

Postby Eugenie Danglars » Sat Feb 26, 2011 4:14 am

1) There's a couple things going on here. First, I know your dad could claim you as a dependent, but is he? Is he claiming on his 1040? Regardless, if you are putting parental info into the FAFSA, you should put both. However, most schools don't require parental info on the FAFSA but rather on the NeedAccess or their own form. Make sure you're following the schools' instructions.

2) I would imagine you're SOL. If you're holding the money, it's "yours," and it's going to affect your eligibility for need-based aid. I can't say how much because I've never had 40k in my bank account.

3) Since you're completing your FAFSA with estimated numbers (make sure you check that box), you could probably just do a proportion of last year's income:tax::this year's income: ?. Obviously, that may be way off, but it's better than nothing. Alternatively, you could plug your numbers into turbotax or taxslayer and see what they calculate but then not file the returns.

Aggiegrad2011
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Joined: Sat Jun 05, 2010 6:42 pm

Re: FAFSA Help!

Postby Aggiegrad2011 » Sat Feb 26, 2011 4:25 am

Can you put the money into like, an Escrow account that isn't technically "yours"?

MPeterson
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Joined: Tue Feb 09, 2010 9:52 am

Re: FAFSA Help!

Postby MPeterson » Mon Feb 28, 2011 10:36 am

For 2.) I would think you would clarify in a comments section (I don't remember if the FAFSA has a section where you can comment) or to an e-mail to the school.

dddhhh
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Joined: Sat Dec 11, 2010 5:55 pm

Re: FAFSA Help!

Postby dddhhh » Mon Feb 28, 2011 10:54 am

1) As previously mentioned make sure to only provide what your school asks for, adding your parents financial information when not asked for in most cases will not help as it makes it seem that they will be contributing financially to your education.
2) take that money out before filing your fafsa & need access - whether that mean writing a check to another family member who can hold it until after financial aid is determined. Or write the school and let them know the situation, preferably providing some sort of documentation. Otherwise you are SOL....
3) Estimate, use last years figures as a starting point. You can always edit your fafsa once your taxes are done.

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hokie
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Re: FAFSA Help!

Postby hokie » Mon Feb 28, 2011 11:02 am

thanks for all the help guys. I actually spoke to my parents and they have agreed to hold onto the money for good. As for my parents financial info, I just going to put my mom's because (please correct me if I'm wrong) I believe that even if one school asks for it, you must put it down as there is no way to fill out two FAFSAs (one with and one without). As today is the deadline it will be a busy day!

Anonymous Loser
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Re: FAFSA Help!

Postby Anonymous Loser » Mon Feb 28, 2011 11:15 am

From another thread:

Anonymous Loser wrote:In the interest of clarity, it is worth pointing out that for the great majority of borrowers, assets are not considered in the EFC calculation. The "simplified" EFC formula is utilized for graduate students with an AGI of <$50,000*; this formula does not consider assets. Moreover, when assets are considered, a .20 conversion rate is applied to arrive at the expected asset contribution figure utilized in the EFC calculation.


*The formula also requires that the borrower be eligible to file a 1040A or 1040EZ, and does consider spousal income.

See generally The EFC Formula 2010-2011, available at http://ifap.ed.gov/efcformulaguide/atta ... 102011.pdf


If the OP is "the average poor working man" as stated above, then the assets in savings will not be considered. If the OP's AGI is above $50,000, then in the worst case scenario, his/her EFC will only increase by 14000, which is still likely within the range where the full range of subsidized loans is available.

As for parental information, reporting such information on the FAFSA will have no effect whatsoever on your eligibility for federal financial aid, as it will not be utilized in the EFC calculation.




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