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Money FAFSA Car Loan Savings Advice

T

TheSiege

Diamond Member
ok so ill start school in the fall and quit one of my jobs
ill have 8k in the bank 8k left on my car loan
and my income will be just enough to survive without rent, GF is taking care of that
if my school was payed for rent would be no problem
but the gov sees that i have 8k in the bank and i doubt ill get a grant
ill be 25 in february

should i

a) pay off car with savings, get cheaper insurance and say F savings
b) invest my 8k in an IRA so that i dont need to report it to the fafsa and hope to get a grant, and risk not getting to my money til i graduate/buy a house
c) just pull the money out/put it in a savings in my sons name or something to that effect
d) you tell me
 
You can't put $8k in an IRA (not in one year, anyway). Narrowed down to 3 options, at least.. 😛
 
It all depends on what school you are going to.

FAFSA or the Gov't doesn't decide how much $$ you get, the school does. They compare you to the other student's monetary situation, and the poorest get the money.

I know a lot of examples where middle class kids goto private schools and get tons of aid money because they aren't as well off as the other students, but at a public university they wouldn't get squat.
 
the school has 25k students, its a state college, it will be a university in ~4 years, there is 41 bachelor programs offered currently
 
I never understand the concept of having a large loan at high interest rate and a large savings at a low interest rate at the same time.

If I were you, I'd pay the car loan now, and then get a student loan if needed. You'll be far better off in most cases doing that. Of course, I don't know any of your specific details, in very extreme cases, you can always make a generally true statement false.

Thus, answer this question: in a fairly bad year, how much of that savings would you go through? If the answer is $3,000 then you only need $3,000 in savings.
 
i'd pay the car so you can get grants or better student loans (which will likely be a lower rate than your car, anyway).

this does raise one of the stupid things about financial aid for students: they penalize you for not having blown all your cash. my parents put me through school (thanks mom and dad!), but i/they received no aid because they hadn't blown all their cash on a boat and a lexus while i was a kid. so the family that lives way outside their means gets grants, and the family that lives frugally and saves gets nothing.
 
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