Minimizing summer earnings' effect on financial aid

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Minimizing summer earnings' effect on financial aid

Postby Anonymous User » Thu Sep 30, 2010 5:46 pm

Hello all,

I am currently receiving a need-based financial aid package equivalent to half-tuition. Having just accepted a biglaw summer gig, I am concerned that my summer earnings will cause my aid to be adjusted against me next year. Are there ethical ways (e.g. moving cash to an LP or paying all my surplus on loans) to minimize the appearance of my summer job on next year's financial aid renewal application?

Thanks for your help.

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Re: Minimizing summer earnings' effect on financial aid

Postby Anonymous User » Thu Sep 30, 2010 5:48 pm

You're only earning like $30k/yr. Isn't that still under most need-based limits?

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Re: Minimizing summer earnings' effect on financial aid

Postby Anonymous User » Thu Sep 30, 2010 5:53 pm

Anonymous User wrote:You're only earning like $30k/yr. Isn't that still under most need-based limits?

Yes. I am more concerned about the money I save from working. It seems that 20k in a checking account would cut against a need-based grant.

Renzo
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Re: Minimizing summer earnings' effect on financial aid

Postby Renzo » Thu Sep 30, 2010 5:53 pm

No way your are the first person at your school to run into this problem. Have you asked the financial aid people what the effect will be?

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Re: Minimizing summer earnings' effect on financial aid

Postby Anonymous User » Thu Sep 30, 2010 5:55 pm

Renzo wrote:No way your are the first person at your school to run into this problem. Have you asked the financial aid people what the effect will be?

True. I am just exploring ethical options before alerting the people who will be making the change to my situation.

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Re: Minimizing summer earnings' effect on financial aid

Postby Anonymous User » Thu Sep 30, 2010 7:00 pm

Depends on your school. I go to HLS and was a 1L SA. I had my grant package cut almost in half and there was nothing I could do to block the effects of it.

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Re: Minimizing summer earnings' effect on financial aid

Postby Anonymous User » Thu Sep 30, 2010 7:30 pm

Isn't the FAFSA a year behind b/c it's based on taxes? If you're an SA next summer (2011), that income would show up on your taxes filed on April 15, 2012. Not sure how that would affect financial aid. This year's income will appear on next year's FAFSA, so a 1L SA might fuck up 3L financial aid.

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Re: Minimizing summer earnings' effect on financial aid

Postby Anonymous User » Thu Sep 30, 2010 7:41 pm

Anonymous User wrote:Isn't the FAFSA a year behind b/c it's based on taxes? If you're an SA next summer (2011), that income would show up on your taxes filed on April 15, 2012. Not sure how that would affect financial aid. This year's income will appear on next year's FAFSA, so a 1L SA might fuck up 3L financial aid.


I'm the HLS poster from above. Most schools understand that's the case, which is why at least this school asks for your anticipated summer earnings, then requires every student to submit a pay stub from the last summer paycheck (if one did not work in a public interest position). So yes, it greatly decreased my 2L financial aid.

jtl2008
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Re: Minimizing summer earnings' effect on financial aid

Postby jtl2008 » Thu Sep 30, 2010 7:58 pm

oh shit, do most schools require this? i figured 2L summer would never be considered in fin aid packages since you submit last year's tax info. if i end up having to pay my school all my summer earnings i am going to be very sad.

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lilybbloom
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Re: Minimizing summer earnings' effect on financial aid

Postby lilybbloom » Thu Sep 30, 2010 8:09 pm

wait, there's need-based aid in law school? i don't get it, wouldn't most people qualify since most people going into law school don't have savings (coming straight from undergrad)?

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Re: Minimizing summer earnings' effect on financial aid

Postby spondee » Thu Sep 30, 2010 8:15 pm

Anonymous User wrote:
Renzo wrote:No way your are the first person at your school to run into this problem. Have you asked the financial aid people what the effect will be?

True. I am just exploring ethical options before alerting the people who will be making the change to my situation.


Is it really a matter of "alerting" them? They'll know what you're making as an SA whether you tell them or not... I don't think you can really hide it.

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Re: Minimizing summer earnings' effect on financial aid

Postby Anonymous User » Thu Sep 30, 2010 8:56 pm

spondee wrote:
Anonymous User wrote:
Renzo wrote:No way your are the first person at your school to run into this problem. Have you asked the financial aid people what the effect will be?

True. I am just exploring ethical options before alerting the people who will be making the change to my situation.


Is it really a matter of "alerting" them? They'll know what you're making as an SA whether you tell them or not... I don't think you can really hide it.

The question really surrounded the ability to negate the income at the disclosure point, it seems fair they wouldn't be the best source of advice as to how to do this.

spondee
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Re: Minimizing summer earnings' effect on financial aid

Postby spondee » Thu Sep 30, 2010 9:07 pm

Sure, but my question is whether it's even possible. They'll know how much you made whether you tell them or not because lockstep salaries aren't secret. So, from that perspective, the whole endeavor of trying to hide it is pointless, no?

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MrKappus
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Re: Minimizing summer earnings' effect on financial aid

Postby MrKappus » Thu Sep 30, 2010 9:10 pm

Couple things: (1) you'll take home about 20k of that 30k; (2) if your mkt pays $160k, your rent and CoL will be high; and (3) you are massively overestimating how much you will save from this job. It will probably be 3-4 thousand, tops. I wouldn't be worrying about it affecting fin aid. It won't.

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Na_Swatch
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Re: Minimizing summer earnings' effect on financial aid

Postby Na_Swatch » Thu Sep 30, 2010 9:13 pm

Anonymous User wrote:
Anonymous User wrote:Isn't the FAFSA a year behind b/c it's based on taxes? If you're an SA next summer (2011), that income would show up on your taxes filed on April 15, 2012. Not sure how that would affect financial aid. This year's income will appear on next year's FAFSA, so a 1L SA might fuck up 3L financial aid.


I'm the HLS poster from above. Most schools understand that's the case, which is why at least this school asks for your anticipated summer earnings, then requires every student to submit a pay stub from the last summer paycheck (if one did not work in a public interest position). So yes, it greatly decreased my 2L financial aid.


How exactly did they decrease your financial aid? Was it like every dollar you earned during your summer directly went into subtracting you Financial aid?

Renzo
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Re: Minimizing summer earnings' effect on financial aid

Postby Renzo » Thu Sep 30, 2010 9:18 pm

MrKappus wrote:Couple things: (1) you'll take home about 20k of that 30k; (2) if your mkt pays $160k, your rent and CoL will be high; and (3) you are massively overestimating how much you will save from this job. It will probably be 3-4 thousand, tops. I wouldn't be worrying about it affecting fin aid. It won't.

If you can only save $3k out of $20k in after-tax earnings for the summer, you have serious spending problems.

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MrKappus
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Re: Minimizing summer earnings' effect on financial aid

Postby MrKappus » Thu Sep 30, 2010 9:33 pm

Renzo wrote:
MrKappus wrote:Couple things: (1) you'll take home about 20k of that 30k; (2) if your mkt pays $160k, your rent and CoL will be high; and (3) you are massively overestimating how much you will save from this job. It will probably be 3-4 thousand, tops. I wouldn't be worrying about it affecting fin aid. It won't.

If you can only save $3k out of $20k in after-tax earnings for the summer, you have serious spending problems.


Have you lived in New York, DC, or SF? Fine. 5-8k. Still doesn't affect fin aid, but you made a really excellent point that added to the thread.

NYAssociate
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Re: Minimizing summer earnings' effect on financial aid

Postby NYAssociate » Thu Sep 30, 2010 9:40 pm

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Last edited by NYAssociate on Tue Oct 05, 2010 8:12 pm, edited 1 time in total.

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MrKappus
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Re: Minimizing summer earnings' effect on financial aid

Postby MrKappus » Thu Sep 30, 2010 9:45 pm

^ You're right. It's actually closer to 18,900. You can get it back after filing, but unless you lie about exemptions, you're going to get taxed like somebody that makes 160/yr. I saw a thread on here the other day that said an associate making 160 in NYC will take home about 97k.

spondee
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Re: Minimizing summer earnings' effect on financial aid

Postby spondee » Thu Sep 30, 2010 9:47 pm

MrKappus wrote:^ You're right. It's actually closer to 18,900. You can get it back after filing, but unless you lie about exemptions, you're going to get taxed like somebody that makes 160/yr. I saw a thread on here the other day that said an associate making 160 in NYC will take home about 97k.


Why would you be taxed at 160K if you only make 30K?

NYAssociate
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Re: Minimizing summer earnings' effect on financial aid

Postby NYAssociate » Thu Sep 30, 2010 9:48 pm

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Last edited by NYAssociate on Tue Oct 05, 2010 8:12 pm, edited 1 time in total.

NYAssociate
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Re: Minimizing summer earnings' effect on financial aid

Postby NYAssociate » Thu Sep 30, 2010 9:49 pm

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Last edited by NYAssociate on Tue Oct 05, 2010 8:12 pm, edited 1 time in total.

spondee
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Re: Minimizing summer earnings' effect on financial aid

Postby spondee » Thu Sep 30, 2010 9:49 pm

MrKappus wrote:Have you lived in New York, DC, or SF? Fine. 5-8k. Still doesn't affect fin aid, but you made a really excellent point that added to the thread.


You're gonna spend $12-15K in less than 3 months? On what?

rcb5142
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Re: Minimizing summer earnings' effect on financial aid

Postby rcb5142 » Thu Sep 30, 2010 9:50 pm

MrKappus wrote:^ You're right. It's actually closer to 18,900. You can get it back after filing, but unless you lie about exemptions, you're going to get taxed like somebody that makes 160/yr. I saw a thread on here the other day that said an associate making 160 in NYC will take home about 97k.


Ya I think you have to be wrong here kappus that makes no sense.

spondee
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Re: Minimizing summer earnings' effect on financial aid

Postby spondee » Thu Sep 30, 2010 9:50 pm

NYAssociate wrote:Taxes are withheld as if you were making $160,000, but you are refunded the money later on.

There are various ways to fix this, depending on how your firm does W2s.


Bummer.




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