Ok ... very pissed, but mom deserves her money. just found out she has over $30k stashed in her checking/savings account (not sure which has more). but, we jsut filled out teh fafsa for my brother and they asked for this information. my mom doesn't wanna cough up that much money out of her pocket cuz she wants to retire with a good amount, which i can understand since SSI doesnt pay much.
does having too much money in checking/savings affect financial aid?
- Thread starter LuckyTaxi
- Start date
- Nov 27, 1999
- 65,517
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If she wants to retire with funds, what in blue blazes is she doing holding it in savings?
Have her stick it in something with income potential, like an annuity or bonds or something. At least you'll get appreciable interest that way.
Have her stick it in something with income potential, like an annuity or bonds or something. At least you'll get appreciable interest that way.
If it's for retirement, it should be in a retirement account, like IRA and 401k. If it's in savings, its fair game.
I am not sure if it matters if it is in your name or not since I do remember the FAFSA asking for how much is in BOTH you and your parents checking/savings account.
ok ok ... she doesnt really understand all the mumbo jumbo of mutual funds and stuff, but i nkow she put some money into IRAs (who knows how much more she has in that). imma leave this stuff to her.
anyways, fafsa asked how much my bro has and how much my parents has. my bro only has about $1k in savings
anyways, fafsa asked how much my bro has and how much my parents has. my bro only has about $1k in savings
yes it does.
simple (quick) solution: take it out of the bank and stuff it in a matteress. It does not ask how much cash she has on fafsa.
NOTE: if her tax statements say how much interest she earned off the money, they are going to ask what happened to the money. This happened to my dad when we sold our house and had that in savings till we got another house. They accepted the "we bought the house" w/o any problems, but i think we did have to put that in writing for the school.
better solution: put the money in a retirement account like IRA and 401k as supertool suggested.
simple (quick) solution: take it out of the bank and stuff it in a matteress. It does not ask how much cash she has on fafsa.
NOTE: if her tax statements say how much interest she earned off the money, they are going to ask what happened to the money. This happened to my dad when we sold our house and had that in savings till we got another house. They accepted the "we bought the house" w/o any problems, but i think we did have to put that in writing for the school.
better solution: put the money in a retirement account like IRA and 401k as supertool suggested.
If your brother is a dependant, then it matters. It will certainly lower the amount of aid that he qualifies for. Money is money.
My wife says to use that money to pay off loans, or even buy a new house with it. You should get totally in debt before applying to FAFSA.
I heard a long time ago that you're a chump to save for your kid's education. I'll go along with that. I'm tired of bitching about people on the dole. If you can't beat 'em...
I heard a long time ago that you're a chump to save for your kid's education. I'll go along with that. I'm tired of bitching about people on the dole. If you can't beat 'em...
All you need to do is make sure all your income is going toward paying bills. Make yourself house poor before applying. From what I hear, it's first come, first served, so don't dally around. My wife is checking all the details now, so I'll keep you updated on what she finds out. There are ways to beat the system. WTF, it's your money... GRAB IT!
DrPizza
Administrator Elite Member Goat Whisperer
Yes, there's plenty of financial aid around..... Ever notice that the majority of people who recommend that you save up for a child's education are the very same people who make money if you do so? From what I understand, if one of my children has 20,000 saved up for education, they're going to factor in 1/3 of that as going toward college expenses... greatly lowering the need for financial aid. If on the other hand, my son has 20,000 in the bank, removes it when he's 16, misses 2 years of interest... the increase in financial aid will most likely offset the loss of interest. (plus, that money will help with the college expenses)
The best financial aid is from the University of Toronto.
Just for the helluvit I was playing around with their Financial Aid calculator. I entered parental income as $5 billion each. I entered my income as $0. Guess what? I get financial aid (a few thousand)!
BUT...
If parental income is $5 billion each and my income is $3000/year, I get diddly-squat.
(Tuition is CAN$5000 here, books are another CAN$1000).
Just for the helluvit I was playing around with their Financial Aid calculator. I entered parental income as $5 billion each. I entered my income as $0. Guess what? I get financial aid (a few thousand)!
BUT...
If parental income is $5 billion each and my income is $3000/year, I get diddly-squat.
(Tuition is CAN$5000 here, books are another CAN$1000).
You can't own any property though, right? Unless I'm thinking of something else, I was told your family's income had to be like $30K a year...
You analyzed it pretty well. The formula used to calculate FAFSA is public, and it's often used as a benchmark for universities & colleges needs assessment as well. Having zero in the bank isn't going to offset the household income component though.
OTOH, there's a major trend in higher education to shift from needs-based to merit-based FA. The end result is a lot of students who would otherwise attend a university may decide otherwise, instead attend JC, or overwork just to make ends meet.
When one of my coworkers was signing up for it several years ago, he told me he had to watch how much overtime he got that year, because of the FAFSA requirements. He's the one who told me you'd be a fool to have the money socked away for a college fund.Originally posted by: manly
You analyzed it pretty well. The formula used to calculate FAFSA is public, and it's often used as a benchmark for universities & colleges needs assessment as well. Having zero in the bank isn't going to offset the household income component though.
OTOH, there's a major trend in higher education to shift from needs-based to merit-based FA. The end result is a lot of students who would otherwise attend a university may decide otherwise, instead attend JC, or overwork just to make ends meet.
Last night my wife told me we would have to make the house purchase during our son's Jr. year, and file for FAFSA on the 1st of January. It is first come first served. She's got a pretty good handle on it, and plenty of her coworkers have already been down this road.
minendo
Elite Member
- Aug 31, 2001
- 35,560
- 22
- 81
Become emancipated from your parents and you should receive plenty of financial aid. The fafsa is what determines how much aid you will receive/need and since it is half-based on your parents' your aid levels will drop drastically unless they have no money.
I'm not thread crapping. You said she had $30k saved for retirement. Maybe you should ask why she has it in her savings account earning the lowest possible interest rate. The are retirement vehicles that shelter this money from the financial aide hawks. So yea, you're screwed until your mom does something else with that money.
If you're considered a dependant, they take into account how much money your parent have as far as financial aid goes (but not retirement accounts). They take into even more account how much money you have. In other words, if you have lots of money and your parents don't, it screws you even more.
You could somehow try to convince the financial aid dept that you're estranged from your parents and are supporting yourself, so your only source of income is yourself. This is fairly hard to do so for obvious reasons. Like someone said, you probably want to get "excess" money tied up in some sort of investment that won't be taken into account with FAFSA (and I do recommend doing it legally)--ie retirement accounts.
You could somehow try to convince the financial aid dept that you're estranged from your parents and are supporting yourself, so your only source of income is yourself. This is fairly hard to do so for obvious reasons. Like someone said, you probably want to get "excess" money tied up in some sort of investment that won't be taken into account with FAFSA (and I do recommend doing it legally)--ie retirement accounts.
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