Sold house, 200,000 extra cash goes onto FAFSA?

Paying for College
21

The escrow account is to secure the contract between two parties, and is just instructions to the escrow company to pay the money to Party A if THIS happens and or to Party B if THAT happens. If there is only one party, then it’s just a savings account and then it needs to be in a bank, insured by the FDIC. I don’t think an escrow company can hold funds for just one party.

Until the OP actually spends the money, it’s just a cash asset.

22

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finaid officers have the ability to override the formula when the information is compelling.


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I don’t see what would be “compelling” if the money is still sitting in savings when the appeal is presented. It would be one thing to ask for the appeal AFTER a purchase is made, showing that the money no longer exists and it all went to buying the primary home.

The bottom line is that may people who sell homes do not put the entire proceeds into the next home. Some hold back some/most for various reasons…to remodel, to pay off debts, buy two properties, whatever. If the money is sitting in an acct at the time of appeal, just saying that the money will be TOTALLY used to buy a home would not be compelling in my opinion.

23

Can the family buy a house with $11,000 less money? If so. Just pay the additional family contribution.

24

I do not think that this is entirely correct. Escrow accounts can take multiple forms and can be used with only ONE beneficiary. The idea is to present a situation where funds were not commingled and dedicated to a specific purpose. Below is an example of the type of account that could be used by the holder of the funds. Although not exactly the same, the spirit is the same. Fwiw, I also believe that most law firms, and especially the ones with title companies connections, can hold the funds to support … a request for a review.

http://www.firstam.com/title/commercial/products/1031-tax-deferred-exchange-services.html

25

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Can the family buy a house with $11,000 less money? If so. Just pay the additional family contribution

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that’s an option…

However, the family may just be naive about FA. They seem to just be exploring options now, and may not understand that FAFSA only schools don’t meet need. They are beyond Pell Grants, and at many schools, that’s the only “need based cash” awarded.

And who knows what a CSS school would do.