<p>my parents own about $50k in mutual funds and stocks but they dont want to report it to my school of choice, suny binghamton. they’re hoping that fafsa won’t ask about it, give me more aid and then sell their stock during my freshmen year to hopefully buy a house…i don’t know what to tell them, whether it’s legal or not? what i am realy scared of is that their plan doesn’t pan out and they get caught, charged with some crime… can someone give me some advice on this?</p>
<p>What your parent are planning to do it is definitely not ethical. Any interest on the mutual funds would most likely be reported to the IRS and would have to be filed on their taxes so eventually it would come out when the school request a copy of your parent’s income taxes.</p>
<p>I agree with sybbie. What your parents are doing is just plain wrong, and you should try to convince them not to do so. I can’t believe it.</p>
<p>The FAFSA is very specific, it asks for the value of assets, mutual funds in their names are their asset…if it is in your name it is your asset…if it is in a trust, it is usually the asset of the beneficiary. They cannot commit fraud and risk jail and fines to hide assets. They could sell the mutual fund and pay down thier mortgage and hide it if SUNY only uses FAFSA- that is legal, but otherwise, tell them not to cheat. Go to the FAFSA site and look at one for last year and review the detailed questions, especially the three worksheets, maybe your parents can shift some items and keep their integrity.</p>
<p>I would like to assume that they are saying they don’t want to have to report it, but would be ethical when the time came. So, give them some info to decide if they can move things around, pay bills in December, not January to minimize assets, etc.</p>
<p>FAFSA does protect some money–the amount is based on the older parent’s age. It’s really important for folks to follow the rules of FAFSA, otherwise the penalties are BAD. FAFSA doesn’t expect folks to contribute 100% of the assets, only about 12.5% of the amount left after subtracting an amount based on parents’ ages anyway, toward income.
If they want to buy their home with whatever assets they own BEFORE they do the FAFSA, they would report things as they are when they fill out the form. Some folks take that approach. It may be worthwhile for them to consider a financial advisor to help them sort all of this out, or whomever helps them with their taxes, or a trusted relative (preferably one who has filled out these forms with their kids recently).
Also, some schools require additional forms like the Profile by CSS, which considers the equity folks have in any home they purchased as well. You do have to have parents fill out ALL the correct forms on or before the deadline to be considered for financial aid.
Starion</p>
<p>Also, some FAFSA schools (like UVA) have their own forms requesting additional info, like home equity</p>