FAFSA

FilmCarp said:

I think in an earlier thread I had suggested, and you didn't like, the military. Based on what you laid out above, a two year enlistment would get him out of the house and get him independence for the fafsa. Just a thought.

Minor thread drift, but joining the military is a HUGE commitment, and shouldn't be taken lightly just because one can't find an easier way to pay for college.

Also, the "two year commitment" is a lie, the shortest commitment is eight years. Sure, you sign up for two years (or three, or four, etc) of active duty, but you are still theirs for the full eight. When I spoke with a recruiter they conveniently "forgot" to mention this, I found out from my grandfather. When I asked the recruiter they acted like it was an oversight, and downplayed the eight year commitment. My grandfather got pulled into WWII in his late 20's, leaving my pregnant grandmother home alone for the duration of the war, because when he had served in the 1930's his recruiter also "forgot" to mention the full duration. He was pissed at the military for the rest of his life for being misled like that.

ElizMcCord said:

shoshannah said:


I would say you're in luck. Financial aid for the 2017-2018 academic year is based on the 2015 tax return. However, if your BIL wants to include his new wife and baby as members of his household, he will need to provide an "update letter," which will of course mean that the feds and school will want his new joint income.

Don't forget that your sister's and your mother's support for your nephew is considered untaxed income for your nephew.

Also, there is no possible way that F/A will be able to help him live on his own and go to community college.

Not to hijack the thread but you seem very knowledgeable on this topic Shoshannah. Have you sent kids to college recently? I have one, due to go in about 2030. Is there something you know now you wish you did when they were 3? I put aside some for her now but with the rising costs, it seems impossible. Rutgers will cost 300K for full time, living in campus by then (before scholarships and grants). Any advice welcome.

Depending on your income, it might actually be less expensive to send her to an Ivy League school.

http://www.npr.org/sections/money/2015/09/30/444446022/what-youll-actually-pay-at-1-550-colleges

Depending on your income, it might actually be less expensive to send her to an Ivy League school.

http://www.npr.org/sections/money/2015/09/30/444446022/what-youll-actually-pay-at-1-550-colleges

That's actually very encouraging. I love Columbia, Harvard and Northwestern. #mydreamsarevalid

Thanks Spontaneous.

ElizMcCord said:

shoshannah said:


I would say you're in luck. Financial aid for the 2017-2018 academic year is based on the 2015 tax return. However, if your BIL wants to include his new wife and baby as members of his household, he will need to provide an "update letter," which will of course mean that the feds and school will want his new joint income.

Don't forget that your sister's and your mother's support for your nephew is considered untaxed income for your nephew.

Also, there is no possible way that F/A will be able to help him live on his own and go to community college.

Not to hijack the thread but you seem very knowledgeable on this topic Shoshannah. Have you sent kids to college recently? I have one, due to go in about 2030. Is there something you know now you wish you did when they were 3? I put aside some for her now but with the rising costs, it seems impossible. Rutgers will cost 300K for full time, living in campus by then (before scholarships and grants). Any advice welcome.

Who knows what the system will be in 2030, but you are so smart to start thinking of it now. I've been through the process several times with Fafsa, CSS, merit aid, and institutional aid. It's pretty daunting. I became fascinated with the process and was determined to get my mind wrapped around it. So I read. And I read more. And more. I try to keep up to date.

Child Savings

Open a 529 plan today if you don't already have one. 529 plans are treated very favorably in the financial aid calculation. If the plan is owned by a parent or the student, the funds in the 529 plan reduced the financial aid award by only 5.64%. Do not have the grandparents or other non-parents open a 529 in their own name to later gift to your child. Yes, the grandparent will get a tax advantage, but it is bad for the student's F/A eligibility. When the grandparent gives those funds to the student to use for tuition, it is considered untaxed income on the student's tax return for that year, reducing his eligibility for aid the following year.

If you think your student will be eligible for need-based aid, do not save money in the child's name (except for a 529). Assets in the student's name are expected to be spent down for college at 20% per year -- and there is no asset protection allowance for the student. On the other hand, assets in a parent's name are expected to be spent down at a rate of only 5.64% per year for college -- AND there is a generous asset-protection allowance for parents.

If you don't think you'll be eligible for need-based aid, the above may not apply. That is, it may make more sense to save in your child's name. The ONLY reason to avoid saving in your child's name (except for 529, which is treated as a parental asset if if in child's name) is because you think you will be eligible for need-based aid.

Retirement Savings

Put as much of your savings as possible in retirement funds. Those funds are protected (for the most part). However, be aware that any contributions that you make in a year you apply for F/A is not protected. It's counted as income because you have the choice to put it in retirement savings or use it to pay for college. But anything ALREADY in retirement savings is (mostly) protected.

Money Gifts

If relatives are gifting money to your kids, put it in the 529 so that it will be counted at the lower, 5.64% rate.

Custodial Situations

For the Fafsa, the student reports only his own income and the income of the parent he lived with the most in the year prior to filing Fafsa. So if he wants to report the lower income, he has to live at least 51% of the time in the prior year with that parent. Also remember that step-parent income counts! If there's going to be a remarriage around the time you're applying for F/A, think about the timing!

Consumer Debt

Financial aid offices don't give a damn about your consumer debt -- credit cards, etc. It won't make a bit of difference in your financial aid award. So if you come across some extra money, use it to pay down the debt.

Bottom line: These are the rules TODAY. It's anyone's guess what the rules will be in 2030. Just keep plugging away at that 529. And remember that an in-state option is not always the cheapest. Sometimes a student can get amazing aid at a private college that makes that choice cheaper than Rutgers.

These are my three favorite sites for F/A an college savings advice:

http://www.finaid.org/about/

https://www.forbes.com/sites/troyonink/#6e87f6e47734

http://www.thecollegesolution.com/

he's been accepted to a 4 year school that costs around $65,000/yr. if I knew for sure his father would be forced to oay 1/2, it might just be worth my $ to oay the other 1/2!

Seriously, though, without the FA, a 4 yr school living on campus is not an option for this kid and that breaks my heart for him.

I hated the CA idea for him but looking at it more closely, first year would cost around $10k and then in-state rates kick in and it's literally $2k a year community college, $10-15k a year if he transfers to a state 4 year school. It sounded crazy but it may make sense

Wow this is gold. Thanks so much.

shoshannah said:

ElizMcCord said:

shoshannah said:


I would say you're in luck. Financial aid for the 2017-2018 academic year is based on the 2015 tax return. However, if your BIL wants to include his new wife and baby as members of his household, he will need to provide an "update letter," which will of course mean that the feds and school will want his new joint income.

Don't forget that your sister's and your mother's support for your nephew is considered untaxed income for your nephew.

Also, there is no possible way that F/A will be able to help him live on his own and go to community college.

Not to hijack the thread but you seem very knowledgeable on this topic Shoshannah. Have you sent kids to college recently? I have one, due to go in about 2030. Is there something you know now you wish you did when they were 3? I put aside some for her now but with the rising costs, it seems impossible. Rutgers will cost 300K for full time, living in campus by then (before scholarships and grants). Any advice welcome.

Who knows what the system will be in 2030, but you are so smart to start thinking of it now. I've been through the process several times with Fafsa, CSS, merit aid, and institutional aid. It's pretty daunting. I became fascinated with the process and was determined to get my mind wrapped around it. So I read. And I read more. And more. I try to keep up to date.

Child Savings

Open a 529 plan today if you don't already have one. 529 plans are treated very favorably in the financial aid calculation. If the plan is owned by a parent or the student, the funds in the 529 plan reduced the financial aid award by only 5.64%. Do not have the grandparents or other non-parents open a 529 in their own name to later gift to your child. Yes, the grandparent will get a tax advantage, but it is bad for the student's F/A eligibility. When the grandparent gives those funds to the student to use for tuition, it is considered untaxed income on the student's tax return for that year, reducing his eligibility for aid the following year.

If you think your student will be eligible for need-based aid, do not save money in the child's name (except for a 529). Assets in the student's name are expected to be spent down for college at 20% per year -- and there is no asset protection allowance for the student. On the other hand, assets in a parent's name are expected to be spent down at a rate of only 5.64% per year for college -- AND there is a generous asset-protection allowance for parents.

If you don't think you'll be eligible for need-based aid, the above may not apply. That is, it may make more sense to save in your child's name. The ONLY reason to avoid saving in your child's name (except for 529, which is treated as a parental asset if if in child's name) is because you think you will be eligible for need-based aid.

Retirement Savings

Put as much of your savings as possible in retirement funds. Those funds are protected (for the most part). However, be aware that any contributions that you make in a year you apply for F/A is not protected. It's counted as income because you have the choice to put it in retirement savings or use it to pay for college. But anything ALREADY in retirement savings is (mostly) protected.

Money Gifts

If relatives are gifting money to your kids, put it in the 529 so that it will be counted at the lower, 5.64% rate.

Custodial Situations

For the Fafsa, the student reports only his own income and the income of the parent he lived with the most in the year prior to filing Fafsa. So if he wants to report the lower income, he has to live at least 51% of the time in the prior year with that parent. Also remember that step-parent income counts! If there's going to be a remarriage around the time you're applying for F/A, think about the timing!

Consumer Debt

Financial aid offices don't give a damn about your consumer debt -- credit cards, etc. It won't make a bit of difference in your financial aid award. So if you come across some extra money, use it to pay down the debt.

Bottom line: These are the rules TODAY. It's anyone's guess what the rules will be in 2030. Just keep plugging away at that 529. And remember that an in-state option is not always the cheapest. Sometimes a student can get amazing aid at a private college that makes that choice cheaper than Rutgers.

These are my three favorite sites for F/A an college savings advice:

http://www.finaid.org/about/


https://www.forbes.com/sites/troyonink/#6e87f6e47734


http://www.thecollegesolution.com/

conandrob240 said:

he's been accepted to a 4 year school that costs around $65,000/yr. if I knew for sure his father would be forced to oay 1/2, it might just be worth my $ to oay the other 1/2!

Seriously, though, without the FA, a 4 yr school living on campus is not an option for this kid and that breaks my heart for him.

It's an option if he applies strategically to the four-year colleges that are most likely to give him substantial aid. Or where he can get merit aid. Many colleges have little or no aid to give. Many have funds to give. Takes tons of research to figure it all out. Or hiring an adviser.

but we've already established he probably won't be able to get aid!

if he could, I'd try to push him towards 4 yr school and dorm living.

conandrob240 said:

but we've already established he probably won't be able to get aid!

For a community college. CCs don't have aid to give. CC students can get federal aid, which is what Fafsa is for. Many 4-year colleges have 1) institutional need-based aid to give, and 2) merit aid. These are different pots of money from the pot of money available to community college students.

Be sure the in-state tuition kicks in after some time. I haven't heard of that. What I've seen is that if the parent you depend on financially lives out of state, you are considered out of state, even if you are in the college's state 12 months a year.

So, he could possibly get aid to a 4 yr school without filing the FAFSA?

shoshannah said:

conandrob240 said:

but we've already established he probably won't be able to get aid!

For a community college. CCs don't have aid to give. CC students can get federal aid, which is what Fafsa is for. Many 4-year colleges have 1) institutional need-based aid to give, and 2) merit aid. These are different pots of money from the pot of money available to community college students.

Ugh. Catch 22. He doesn't get financial support from a parent...

Tom_Reingold said:

Be sure the in-state tuition kicks in after some time. I haven't heard of that. What I've seen is that if the parent you depend on financially lives out of state, you are considered out of state, even if you are in the college's state 12 months a year.

Of course, four-year private schools are more expensive than cc's, so I'm not sure how that is a better option. Schools want to know recent income of biological and legal parents if the student is being considered for need-based aid. If the student is extraordinary in athletics or academics, and the parent(s) isn't providing information, perhaps a private college would consider some type of merit aid, but I'm not sure what institution that would be. For an institution to say, we're willing to invest in the student, but first we want to know the family's finances, isn't unreasonable.

There are lots of deserving students out there, and aid resources are finite. The parent needs to understand that if he doesn't reveal his income, he is making it nearly impossible for his son to receive any type of meaningful aid. I don't see the way around this, but wish you luck.

conandrob240 said:

Ugh. Catch 22. He doesn't get financial support from a parent...

He's financial dependent on someone. But check.

One thought, and it's a long shot, is to emancipate him at the age of 18, and he can declare himself financially self-sufficient. He'd have to live like that for a year or two. Then he can apply to colleges, and he would qualify for a lot more aid than he would if he's financially dependent. He can also move to his preferred state and set up residency.

conandrob240 said:

So, he could possibly get aid to a 4 yr school without filing the FAFSA?

shoshannah said:

conandrob240 said:

but we've already established he probably won't be able to get aid!

For a community college. CCs don't have aid to give. CC students can get federal aid, which is what Fafsa is for. Many 4-year colleges have 1) institutional need-based aid to give, and 2) merit aid. These are different pots of money from the pot of money available to community college students.

No, I didn't say that. With very, very few exceptions, every college will require Fafsa. The first pot of money is the federal money. Then after that, the state money. Then the institutional money. Moreover, to get institutional money for need-based aid, there is an additional form, the CSS Profile, which is even more intrusive.

There's one situation I can think of in which he would not have to file Fafsa. If he applies to a college for which his grades and Sat/ACT scores are in the 75th percentile for enrolled freshmen, he could get merit money not based on financial need.

Tom_Reingold said:

Be sure the in-state tuition kicks in after some time. I haven't heard of that. What I've seen is that if the parent you depend on financially lives out of state, you are considered out of state, even if you are in the college's state 12 months a year.

In California, the state her nephew is interested in, he would not ever get in-state tuition. Some states will allow it after freshman year. Not California.

Tom_Reingold said:

conandrob240 said:

Ugh. Catch 22. He doesn't get financial support from a parent...

He's financial dependent on someone. But check.

One thought, and it's a long shot, is to emancipate him at the age of 18, and he can declare himself financially self-sufficient. He'd have to live like that for a year or two. Then he can apply to colleges, and he would qualify for a lot more aid than he would if he's financially dependent. He can also move to his preferred state and set up residency.

No. Even if he is emancipated for other reasons, he cannot be emancipated for college financial aid. Not until he's 24 or married, whichever comes first.

apple44 said:

Of course, four-year private schools are more expensive than cc's, so I'm not sure how that is a better option. Schools want to know recent income of biological and legal parents if the student is being considered for need-based aid. If the student is extraordinary in athletics or academics, and the parent(s) isn't providing information, perhaps a private college would consider some type of merit aid, but I'm not sure what institution that would be. For an institution to say, we're willing to invest in the student, but first we want to know the family's finances, isn't unreasonable.

There are lots of deserving students out there, and aid resources are finite. The parent needs to understand that if he doesn't reveal his income, he is making it nearly impossible for his son to receive any type of meaningful aid. I don't see the way around this, but wish you luck.

It COULD BE a better option because many colleges provide MERIT money. Not "perhaps." MANY do. The student does not need to be super smart; he just needs to be in the 75th percentile of students who go to that college.

he will not be entitled to any merit aid.

conandrob240 said:

he will not be entitled to any merit aid.

You'd be surprised. What are his SAT or ACT scores, if you don't mind saying?

he won't be entitled to any merit aid. His scores are low as are his grades.

conandrob240 said:

he won't be entitled to any merit aid. His scores are low as are his grades.

OK. So his only option for aid is need-based aid. It doesn't sound like he can afford to go to a CC out of town. Students who go to CCs do it to save money. Going across the country defeats that purpose. Based on what you've said, his best bet is probably to go to a SUNY community college in New York State that has an articulation agreement with a four-year SUNY. Tuition at Suffolk Community College is $2,385 per semester. He needs to work on his dad regarding the Fafsa so that he can see if he's eligible for a partial Pell grant. He will at the very least be eligible for a subsidized Stafford loan. He also needs to look into New York's TAP. He'd likely get money from that too.

If his father still refuses to fill out Fafsa, then your nephew will have to work to put himself through college, which is possible with community college and SUNY.

Out of state rates for community college in CA are in line with what he'd pay in NY or NJ at in-state rates. But, yes, the fact it won't go to CA in-state the 2nd Year puts a huge damper on that plan.

in case anyone's interested, it's less than around $400 per class for CA in-state at community college! Crazy!!

Thinking ahead, out of state tuition at a four-year California state college is very expensive. And he still won't be a California resident. If he's going to CC, it helps to think of the entire package -- where's he going to go afterward and can he afford it?

conandrob,

I regret that my simple query has troubled you.

I will not trouble you further on this matter.

Fare well and do good.

TomR

The National Association of College Admissions Counselors maintains a list of colleges and universities that have openings for freshmen after the May 1 decision deadline passes. It could be useful for a student who isn't accepted anywhere, or whose financial needs aren't met by schools where he has been accepted. The list often includes public colleges where establishing residency is relatively easy or encouraged. (A nephew has had amazing success at the University of Utah and was able to qualify for residency by the end of his freshman year. On the other hand, New York and Vermont, for example, make it almost impossible if you are a full-time student.) It's too early for this year's list, but it's worth keeping it on the radar. Here's an overview from last spring:

https://www.usnews.com/education/best-colleges/articles/2016-05-05/hundreds-of-colleges-still-accepting-2016-applications

Good to research options thoroughly. Many states don't allow you to establish residency while you are a full time student. If he really wants to be in CA he should move there and work full-time for a year supporting himself and then start going to CC. Just so you know, in-state CA students have a hell of a time getting into the CA university system. They favor giving admission to out of state and international students because they can charge them full freight and more. And the FAFSA is generally required for any aid applications even if you know you won't qualify for "need" but want to apply for non-need based awards (merit, etc.). He needs to decide what he really wants and leave that disfunctional home as soon as possible after graduation. Working a gap year could give him some clarity and motivation to take his future into his own hands and work for what he wants. It won't be easy, but many successful people have had to make their way the hard way. What is important is the moral support and guidance which he has in you.

shoshannah, you really are the expert. Thank you.