Greetings and new to the forum.
My wife was hit from behind in 2009 which resulted in surgery this past Spring. It was 5.5 years of soft tissue work only to learn there was no alternative to surgery, with additional surgeries looming. As a result she has received a partial claim andwilll be receiving a future claim; a direct result of the accident.
We are setting the claim aside for the future.
My question is how do we shelter this from CSS/FASFA ? This claim is to be used specifically for the health of my wife. How do Iwe keep these monies in tact and not increase our asset picture, therefore not qualifying for pre claim payment benefits to the college? Is there an IRS designation/form that when identified by CSS/FASFA, would exclude asset/income picture?
I am sorry to hear of your wife’s suffering.
You can’t leave the asset and any applicable income (taxable or nontaxable) off of the financial aid forms but you can ask the schools’ financial aid officers to exclude/discount such amounts when determining the financial aid package through professional judgement however there are no guarantees.
Have you tried using a few Net Price Calculators (NPC) with and without the settlement money to get an idea?
Is your student a high school senior?
How much can you afford to pay each year for 4 years?
Is this an insurance settlement?
Madison 85, no NPO attempts yet.m. What is “Professional Judgement” ?
Thumper1, yes it is an Insurance settlement.
From your other thread, I believe this is an insurance settlement, right? I don’t believe these are considered “income”. BUT if the money is in the bank when you file your FAFSA or Profile, it would be an asset.
You could ask for professional judgment at each college. The financial aid officers can review your request…you would need to document the amount, the settlement, and the nature of what this will be used for in the future. It is possible that the financial aid folks will not count this asset. No guarantee…just a possibility.
You will need to ask for this professional judgment every year your child is in college.
Assets are assessed at 5.6% of their value for FAFSA purposes.
Will your child be attending a school that meets full need guaranteed for all? what about your income? The financial aid formulas are heavily weighted using income. So if your income is above a certain threshold, this might not matter.
@BearLake Professional Judgement (aka PJ), is when a Financial Aid Officer is allowed to use her “professional judgement” that an adjustment should be made. In your care, hopefully, she would remove the claim from being considered.
Sounds like you will need some of the money for surgeries? I wonder if there is a way to put a portion into a “qualified annuity” (pre-tax dollars, as opposed to the “non-qualified” sort.) I’m far from an expert, but some allow you to take out money for needs, sometimes with no penalty after x months, and then subject to IRS on growth.
Some general background http://www.finaid.org/educators/pj/principles.phtml
You and your child will need to go into the college hunt with eyes wide open. You want a college willing to work with you and an approach that is realistic about what you can truly afford versus “dream schools.”