Savings for car while on two year volunteer mission and FAFSA

Paying for College
1

Hi, I have two kids who sold their cars while serving volunteer missions for two years. They will be getting back a month before school starts and they both have about $10,000 in their accounts to use to re-buy cars when they get back. I’m worried that this will count a lot for FAFSA but, not sure what other options we would have to count it as car money. Also, I’m not sure when we fill out FAFSA to start funding searches.
They come back June 2019, in one year. I would love any advice.

2

They would want to have purchased the car before filling out the FAFSA. FAFSA uses $ figures as of the day of filing. If the money is in the account that day it will bring the EFC up by (I believe) $2000. If the school does not meet need and you are not close to Pell eligible then it may have NO effect on what your kids are offered.

3

So many scholarships and school aps require FAFSA though and that would be due in Feb or March before they’re back. Our family income is around $90000 but the kids haven’t had incomes for the two years they’ve been out. Even with two out I don’t think we would be eligible for much.

4

If they are returning students, the FAFSA due dates might be later. It would depend on the school and whether they are getting other aid based on FAFSA from the school. There wouldn’t be a deadline for a Pell grant, but the school might run out of SEOG money or its own grant money, and you mentioned scholarships which of course could have earlier deadlines.

There really isn’t any way to avoid reporting money sitting in a bank account. You can contact the school’s FA office and explain the situation, what you previously received in FA, and ask what to do.

I suspect you might be on the edge of a Pell grant, but may benefit more with other aid if you file on time and get school aid or a scholarship, even with the student assets high.

5

I hate to ask this…but why do they need cars?

6

Yes, will they need a $10,000 car while in college? Could that money be put into a college savings account to be used for school, and count as a parent asset?

7

You know…a few things to consider.

  1. The vast majority of colleges do NOT meet full financial need. So, while your kids have savings...the colleges might not give a nickel more need based aid to them without that money in the bank.
  2. It sounds like you are hoping there is a way for the colleges to not use that $10,000 each in student savings for your kids. Really...that’s not going to happen. For FAFSA purposes, 20% of the savings will be added to your FAFSA EFC...so...$2000. It’s not like the FAFSA formula uses ALL of that savings. Your kids will still have $8000 each even IF they have to contribute that $2000 from their savings towards college costs.
  3. Cars are money pits. In addition to the cost to purchase, there is insurance, gas, maintenance, parking, etc. none are free. Is it essential that the have cars while attending college? If not, perhaps that should be reconsidered.
  4. Colleges are not going to increase your need based aid to preserve money for consumer spending...and that’s is what a car purchase is.