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Claiming Assets on FAFSA

avepatdavepatd 5 replies2 threads New Member
So I've got about 6,000 saved up over the past couple years, but as an opportunist and someone who's terrified of not having enough money, I'm not really looking forward to claiming all that on my FAFSA. I've found a couple sites that mention transferring or "gifting" your savings to a relative so you don't have to claim them. Is this a perfectly safe and legal thing to do? If so, then at what point will I be able to safely have my money given back to me?
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Replies to: Claiming Assets on FAFSA

  • austinmshauriaustinmshauri 9011 replies335 threads Senior Member
    edited October 12
    If you transfer your money to someone else to hold, it's still your money and you still have to declare it. If you have $6,000 in your savings the most it would add to your EFC is $1200 (20% of the total), but that's only if they count all of it. If there's an asset allowance they may not count all of it.
    edited October 12
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  • thumper1thumper1 75200 replies3300 threads Senior Member
    edited October 12
    You would have to give the money away with no strings attached. In other words...you would have to give it to someone else to spend. Like maybe donate it all to charity.

    If all you are doing is giving the money to a relative to “hold” for you with the expectation you will get it all back...it’s still your money and must be reported on your financial aid forms.

    You could put it into a 529 account where it would be assessed at the Parent asset rate of 5.6% rather than the student one of 20%. But you would need to do that ASAP...and really that money would need to be spent on college costs. This is for FAFSA purposes.

    You could also use some of that money before you complete your financial aid forms for expenses you plan to incur anyway. Do you need a new computer, for example?

    Note...if you really gift someone money...you are never entitled to get it back.
    edited October 12
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  • BelknapPointBelknapPoint 4548 replies16 threads Senior Member
    Is this a perfectly safe and legal thing to do?

    No.

    And really, just spend ten seconds to think about this. If this scheme was a perfectly safe and legal thing to do, wouldn't every student and parent out there who was looking to reduce their FAFSA EFC simply temporarily "gift" all their assets to a family member, with the expectation that all those assets would come back when need-based financial aid is no longer an issue?
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  • avepatdavepatd 5 replies2 threads New Member
    Thank you guys for the responses! It did seem too good to be true honestly
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  • twoinanddonetwoinanddone 23249 replies17 threads Senior Member
    Is it legal to give all your money away? Sure.

    Is it safe? Depends on your relatives.

    Can you omit them from your FAFSA if you expect to reclaim them? No.
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  • cptofthehousecptofthehouse 29596 replies58 threads Senior Member
    Are you a high school student? Many give their money to a parent as reimbursement for expenses. If that parent is paying for college, it could used for those expenses that year, but there is no contractual obligation. If in the parents’s name as if date FaFSa is filed, those assets assessed at 5,6% instead of the student’s 20% hit.

    If you are eligible to contribute to a Roth IRA , money sitting in that account are not reported on FAFSA.
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