I come from a low-income family, so I am eligible for financial aid and have been awarded Cal Grant A. I’m still a bit blurry about how financial aid will work (I know enough that it would be distributed to a credit card account for use of tuition+fees), but I have a bit of a problem.
At this time, I am 17 years old, which means I can only open an account through a joint account. I don’t know when financial aid will be distributed, but I fear that if I open an account now, and financial aid will be inserted into the joint account, my financial aid could be possibly revoked because of my parents current assets (I don’t know my parents’ assets, nor did I report any). Should I still open through a joint account now or should I wait until I’m 18 to open an account by myself? (My birthday is on August 29, about a few weeks before fall semester starts).
Are you saying you didn’t report assets on your FAFSA form? Were you asked that question and put $0…or was that not asked of you because you qualified for the simplified needs test?
Your Cal Grant funds will first go to your school, so you should contact your school’s financial aid office for information on its disbursement policies. Schools disburse the funds to their students based on their disbursement schedules. Since the school is responsible for payments, you will need to work with your financial aid office to resolve issues with payments. If the school determines that a student is not eligible, they have the authority to withdraw the award.
Which school disburses your Cal grant via credit card @sadstoryboard?
some schools do refund any remaining fund onto a debit card. You don’t open a separate account but one through your school and it will be in your name. My daughter had the option of the card, an ACH deposit into a bank account, or a hard check cut to her. We picked the ACH and it went into my account (the parent) and that worked best for us. Her first refund was a big one because she joined a sorority and her meal plan was refunded to me (but of course i then had to pay the sorority bill). A few other times she dropped a class and then added another ad the funds were refunded in the meantime so I got a credit for $1500 but had to repay it the next day.
It’s fine that you are 17. You are allowed to get student funds refunded to you and take student loans and it’s a legal contract.
Who filled out the FAFSA? If your parents did, they disclosed the assets.
@thumper1 My EFC is $0, and I don’t quite remember if I was asked or was deemed qualified because I submitted my FAFSA in December. @Gumbymom I am going to commit to UC Irvine. @twoinanddone I filled out the FAFSA, but my parents’ tax information was transferred from the IRS so I’m not quite sure where to look for my parents’ assets in their tax returns.
Your parent assets are not on their tax returns…at all (well…unless they own rental properties).
Assets are things like bank accounts, certificates of deposit, cash stuffed in your mattress, a second home equity.
Do you qualify for free or reduced lunch, or were your parents eligible to file a 1040A or 1040EZ tax form…with income below 49,000? If so, you would not have been asked for assets.
@thumper1 I have free lunch and my parents filed a 1040A tax return with an income less than $20,000.
If that’s the case, will my financial aid still be in jeaopardy if it was disbursed into a joint account? (Since my parents have a few thousand dollars in their account)
The funds will be disbursed into the account YOU tell them to. If you are concerned, have a hard check cut to you and you can take it to your bank. If you don’t want to co-mingle your school funds, set up a different account.
You’ll only receive what is left after all your costs to the school are paid - room, board, tuition, fees. Usually there isn’t that much left over. You also won’t get that money until school starts and it usually comes a few weeks after school starts.You have plenty of time to set up an account on your own if you’ll turn 18 before then, or you can get it on a debit card, or you can have your parents set up a separate account with just your money in it.
@twoinanddone Ahh I see. Hopefully I can talk this out with my parents and see how they’ll go about with whether or not I open an account at this time. Thank you very much everyone!!
It sounds like your assets would not have been required if you indicated FREE lunch and the lower income on your FAFSA form.
I still want to know…I realize the Calgrant is disbursed first to the college. Do the colleges really put ALL of this on a debit or credit card…and then have the student pay?
Or do the colleges take their share…and only put any refund entitled on the credit card?
@thumper1: Each school may do it differently but the student will set up their school account first where the payments will be made and as @twoinanddone stated a refund could go on a debit card or to an ACH deposit.
When you give them your bank account, they only get the number. Like when you give someone a phone number. They can call you, but they don’t get access to inside your phone. Same with giving them your bank account #. They can send money but they can’t see anything in there.
In addition, I’d assume that if your parents didn’t report these assets, it’s because they are recent and did not fall under the reporting period for the FAFSA.
Finally:
Even if the school could see this–it absolutely cannot–this would not be the kind of asset that would reduce aid. Everyone needs a few thousand in their account to live. That’s considered a very small account cushion.
The kind of assets that would factor into financial aid in the future would be like investment funds in the 10s or 100s of thousands of dollars, large vehicles worth 10s or 100s of thousands, second houses, etc.
Do not worry. You are fine with a joint or a personal account but I advise getting a personal account and taking good care of it. It will reduce the chances that this money could be accidentally used in an emergency by your family (for example if they fall into debt for medical reasons).
The reporting period for assets that are required to be reported on FAFSA is the day that FAFSA is completed. Whether or not the assets are “recent” has nothing to do with the reporting requirement.
Unless the simplified needs test comes into play, any reportable assets, regardless of value, must be reported. A checking account with a $10 balance on the day that FAFSA is completed? Reportable. A savings account with a $3.28 balance on the day that FAFSA is completed? Reportable. Obviously, small amounts like this will on their own have very little affect on need-based financial aid, but they still must be reported.
But if parent assets are required to be reported on FAFSA, then there might be a question that asks if the assets were over a certain $ amount (asset protection allowance).
At least that was the case for us.
Of course for student assets there isn’t any asset protection allowance.
If auto zero EFC or simplified needs test applies, then parent and student asset questions should be skipped in FAFSA (unless they are required for state aid).
This student posted that the parents filed a 1040a tax form. And income was low. They likely qualified for the simplified needs test and the asset question didn’t even appear on their fafsa.