FAFSA and student loan technical questions

Paying for College
1

<p>I am an older returning student with a wife and child returning to college (I have no degree)</p>

<p>My wife was fortunate enough to have received a cash inheritance of a pretty significant amount of money not millions, but maybe enough to sustain our family for a year with no income (trying to be vague here)</p>

<p>Some of this is held in her name as sole and separate property (which I know doesn’t actually mean much in most states)</p>

<p>Some more of it is held in joint tennancy with her mother, but my wife’s social is on the account.</p>

<p>I am not working, and my wife makes about 60k, so it seems like from an income standpoint we should qualify, but the cash may be a problem.</p>

<p>Does anyone know if those two sources of savings need to be reported on the FAFSA for me? I applied last year, but I am at a community college so it wouldn’t have been much money. I included the savings on my FAFSA, but it also was the year that I was laid off, so my severance package was included in my income, so I actually made more money that year than I did the previous one, but I noted that I was no longer employed. </p>

<p>Any ideas which one was the bigger reason for denial?</p>

<p>Honestly, it’s not really about getting any free money, grants, tuition discounts, etc., just access to federal student loans. Perhaps someone can point me to information about non need based loans that are not a total scam.</p>

<p>I know I am in better shape than many people who are applying, but it doesn’t seem quite right that I should have to go broke (which I will) before I get any support, then have no financial security when I finish school.</p>

2

<p>For an independent student, a family income of $60,000 will probably preclude you from being eligible for any need based federal grants such as the Pell. Even a dependent student whose parents earn $60k would probably not get any pell. Yes, the assets all have to be reported. it makes no difference that they are held in your wife’s own name as far as FAFSA is concerned. It is your combined income and assets that must be reported. The main assets that do not have to be reported are retirement accounts and the primary home. Pretty much all other assets must be reported. </p>

<p>You should be eligible for at least unsubsidized federal loans (and possibly subsidized ones depending on your EFC and the school’s COA). All students are eligible for unsubsidized loans as they are not need based. The loan limit for a sophomore independent student is $10,500 (though combined loans and any other aid/scholarships can not exceed the COA of the school). I don’t know why your school would not have offered them to you. Some schools do not automatically include the unsubsidized loans if the FA package for dependent students (instead offering parent PLUS loans), but I am surprised they would not offer them automatically to an independent student. The best thing is to ask the school.</p>

3

<p>family income of $60,000 will probably preclude you from being eligible for any need based federal grants such as the Pell.</p>

<p>Does this vary by location? We live in San Francisco, so that puts us below the median family income of 71k. That 60k is AGI by the way, I don’t remember whether FAFSA asked for AGI or net taxable. We have a mortgage payment that takes up a considerable portion of that.</p>

<p>If, in fact, all of that indicates that I will not receive federal aid, then there is no reason to do the money shuffling that we were considering (nothing shady, but I have some CC debt that I am currently not paying interest on, and if it would have helped, we would have paid those off with the savings.)</p>

<p>But there would be potentially aid from the school based on the FAFSA info, even if federal aid was denied, right?</p>

<p>To be honest, I haven’t been diligent about doing my FA research, but now that I am considering transferring from an $800/year JC to a, $11,000/year university, it matters much more.</p>

4

<p>No, it really won’t make a big difference where you live. In the EFC formula, the only thing that varies by state is the % of income allowed for State and other tax allowances. It will make a slight difference that you live in CA, but not a lot. FAFSA does not take into account your mortgage but also does not take into account the value of the primary home. To be eligible for the max Pell requires an EFC of 0, to be eligible for any Pell requires and EFC of a tad under 5,000 currently (changes every year and I believe it dropped this year). </p>

<p>FAFSA uses the AGI, not taxable income. With an AGI of $60,000 and one child, I would expect your EFC to be in the 8-9,000 range without taking any assets into account. There are EFC calculators on the net that you can plug your figures into (have you not filed FAFSA arleady this year?). Finaid is one, it has not been updated for several years though. The actual EFC formula can be found here
<a href=“http://ifap.ed.gov/efcformulaguide/attachments/082511EFCFormulaGuide1213.pdf[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/082511EFCFormulaGuide1213.pdf&lt;/a&gt;
There are several, you would need to scroll through to find the formula for independent student</p>

<p>As an independent student you have some asset protection based on your age and marital status. For instance a married 30 year old student has $12,200 asset protection, a 35 year old $24,300. Then only a % of remaining assets go to the EFC. The EFC is primarily driven by income unless assets are very high.</p>

<p>Aid from the school depends completely on the school and the State. You would need to check whether your school offers any need based aid outside of federal aid (many do not) and if so, do they promise to meet fll need (most do not). I know CA has some fairly generous aid programs such as calgrant and blue and gold. As you are not the traditional student coming straight out of HS, you would need to check whether you are eligible for any of them.</p>