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financial aid and my $

nasrnasr Registered User Posts: 3 New Member
Hi i've got a questio for you guys.

My grandma has a large amount of cash, and she can't put it in a bank. And i'm currently on financial aid, and don't wanna loose it. If i put the money in my bank of america checking account, and not declare it, an use it indescrimentally for miscellanous expenses. So would the fed government or anybody else would be able to find out about the account? The $ is in about 10k range, and would probably be used for savings and car.

Thanks
N.
Post edited by nasr on

Replies to: financial aid and my $

  • 4830248302 Registered User Posts: 42 Junior Member
    I don't know what to say...oh yes I do...ethics and clear conscience...do those words mean anything?
  • paulhomeworkpaulhomework Registered User Posts: 966 Member
    Yes, they will be able to find out.
  • ottothecowottothecow Registered User Posts: 1,042 Senior Member
    You could try dropping it into a CD.

    I'm sure that the college would at least know that CD's arent available for immediate withdrawl.

    You can also just hope thtat the college doesnt ask for too much of it.

    I know, its a sucky part of the system that the kids who blew their money on cars or continuous clothing shopping get to keep the car or the clothes (its not like the schools check non-monetary assets for students) and the students who started saving their money are required to pay the money at the highest possible percentage in financial aid calculations.

    I think there is a point though where they no longer require the money from the student (and even if you dont have money in the bank, they want money from summer earnings).
  • nasrnasr Registered User Posts: 3 New Member
    does living in the most expensive zip code in the contry mean anything?

    So will they find out if i have some money in my checking account?
  • itstoomuchitstoomuch . Posts: 1,745 Senior Member
    The government and your school assumes that you are honest and forthright. Because of this presumption, Congress and schools, have appropriated money for grants, scholarships, stipends, and loans. If there is large scale "fudging," the entire system becomes nonfunctional.

    Imagine if only a few people were able to cheat on the SAT's. Everybody's scores would immediately become suspect and questionable.

    Further, if you completed the FAFSA, you and parents, are liable to penalties and probable sanctions. I am not a lawyer, however, the burden of proof may lie with you and not the government or school.

    quote:
    [q]If you purposely certify to false or misleading information, you may be fined $20,000, sent to prison, or both.[/quote] from fafsa signature page.

    FYI: We have annually filed fafsa (4years), Have unsubsidized Staffords and in-payment PLUS loans (which means that the nice people of the USofA is not paying for our kid's education) And have been fafsa audited every year. I expect to be audited again this year. And we do not live in a high net worth zip.

    Do you remember Martha? She didn't go to jail and fined because she violated the securities laws, but when to jail for lying and perjury.
  • speedospeedo Registered User Posts: 1,204 Senior Member
    You need to talk to a professional money manager or accountant. Sometimes gifts are non taxable. You can put the money in your account, buy the car and leave the remainder in your account. Or you could have your relative buy the car for you and just give you the rest in cash. For FAFSA you need to declare your income and how much you have in the bank. If this money is not offically income and your bank account is not over a few thousand you should not have too much trouble with fin aid, but again you need to talk to a professional.
  • mhc48mhc48 Registered User Posts: 1,295 Senior Member
    Legally one is allowed to give a gift of up to $11,000 tax free. It does not effect the recipient and it is not income, thus it is not reportable on your income taxes. Nor does it affect Grandma's income or estate taxes (assuming she files the first or someone would file the later at some point in time given the cryptic statement that she cannot put money in the bank)

    I don't see how the question of "hiding it" or showing it, for that matter even comes up on the FAFSA. Though since she's obviously going to give you cash, why put it into a checking account and/or why put all of it all at one time into a checking account if there is a concern.

    As you describe it, I see nothing illegal here. As I say,it's not income, and she has no legal obligation to support you or give you money for college, therefore it should not be figured into resources for college if handled properly. This is just sound financial planning, much like sound tax or estate planning.

    However, Grandma can also just pay your tuition bill (anyone can pay your tuition). If she doesnt' have a checking account or can't put that money in, she can buy a bank check. For that matter, she can also buy you a car.
  • mhc48mhc48 Registered User Posts: 1,295 Senior Member
    BTW, in addition to the $11,000 annual Gift Tax exclusion, there is a 100% exclusion if she makes direct payments for your tuition expenses. The payments must be made directly to the educational institution. Payments to the recipient cancels the tax benefit. Room and board, supplies, books and other fees do not qualify.
  • SusantmSusantm Registered User Posts: 2,188 Senior Member
    I don't see how you could legally "hide" it, even if it is a gift. Doesn't the FAFSA ask how much money you have in savings, checking, and cash? So even if you stuck it under your mattress, you would have to report it on FAFSA.
  • mhc48mhc48 Registered User Posts: 1,295 Senior Member
    The point is that Grandma doesn't have to "give" the money or if she does, give it at one time:

    Scenario #1: Student fillls out the FAFSA form, in January or February 2006 and truthfully lists no savings. In July 2006, Grandma writes a check up to $11,000 for tuition for school year '06 - 07. Student still has no savings to "hide". Or Grandma could send student a check in July for $11,000 which he puts into his checking account and uses to pay for tuition. The money is gone by the time he fills out next year's FAFSA. He "hopes" Grandma will do the same next year, but she may or may not (depends if he writes nice letters to her and visits)

    Scenario #2: Grandma buys or contributes up to $11,000 for student's car (or cumulatively, computer, trip to the Bahamas, Year Abroad).

    Scenario #3: Grandma voluntarily gives student a montly stipend of $X,XXX.00 dollars. If student puts it in his checking account, so what? Its still depleted by the time the next year's FAFSA is filled out.

    Grandma has no legal obligation to give this money and she could stop anytime. Moreover, there is nowhere for it to be reported on FAFSA or Fed Tax. Which means, nothing to hide, no impropriety.

    The only thing wrong with this scenario is that, unfortunately, my daughter and most of the other poster's sons and daughters here don't have a Grandma like this.
  • nasrnasr Registered User Posts: 3 New Member
    Thanks for your help.
    I also thought the same. By the time next fafsa or college's financial office verifications roll around, i could truthfully declare all my assets and gifts.
    That should work. Thanks
This discussion has been closed.