<p>She’s looking at range of selective to highly selective schools with engineering programs including LACs with small programs, mid-sized private unis (Case, Bucknell, Rochester, etc), tech schools (RPI, WPI, RIT) to in-state flagship. Long list at moment, needs to be pared down and more financial aid safeties added IMHO.</p>
<p>Female engineering students are in demand. If she has the academic qualifications for admission to the most selective of the schools you’ve mentioned, I think it could be good for her to focus on well-endowed schools with generous FA. Such schools (private, not public) can be responsive to compelling personal situations and are not bound by formulas because it is their own money. For instance, the FA at Bowdoin College, in Maine, is all grants, and although the school is a small LAC, there is a 3-2 Engineering program invoving additional study at either Columbia, Caltech, UMaine or Dartmouth. [Engineering</a> Programs (Bowdoin, Physics and Astronomy)](<a href=“http://www.bowdoin.edu/physics/engineering/index.shtml]Engineering”>http://www.bowdoin.edu/physics/engineering/index.shtml). Whatever she does, I recommend writing to point out the family situation so it is not just the PROFILE and FAFSA that are submitted. I wish her the best.</p>
<p>The life insurance payout has to be reported as required. The family can then request a special circumstances review. One thing a school “can” do (is not required to do, as it is PJ), is pull the amount out of income and only count it as assets. It would be wise to pay the bills before requesting the review, and submit the receipts with the request, to show what the money was spent on … the amount assessed toward assets can be reduced by that amount (most aid officers won’t reduce the assets by what someone “will” pay - the paid bills should be presented as evidence that the money has been spent and for what purpose). This would be more beneficial. It is hard to justify just ignoring a bunch of money. There has to be some assignment of the money to the EFC formula, and if some is not assigned (such as money used to pay for hospital and funeral bills), there needs to be documentation of why that determination was made.</p>
<p>Kelsmom…</p>
<p>Thanks for clearing up the question about whether the payout needs to be reported and how a review should be requested.</p>
<p>Now, if one aid officer uses PJ and decides to pull out the amount of income that was spent paying medical bills, etc, then will that change her FAFSA for all schools? </p>
<p>So, my question is…as long as she finds one school to use PJ to adjust FAFSA/EFC, then all schools follow the same?</p>
<p>No, PJ is school by school. Each school makes its own determination, based on its internal policies and procedures. It can actually vary by finaid officer at a school — that happened in our office from time to time, and our boss was the one who would have to either decide to uphold the determination or change it (if the student appealed).</p>
<p>Ok…so when PJ is used, does that change EFC? or not? Could a FA officer use PJ to adust EFC so that a student then qualifies for Pell (at that school only???)</p>
<p>If it doesn’t really change FAFSA EFC, then would it only affect the institutional aid the person might get?</p>
<p>The aid officer cannot change the EFC itself. She can change the elements of the EFC, which in turn will usually lower the EFC. Sometimes that impacts the EFC such that the student is Pell-eligible, other times it allows more institutional aid, other times it results in sub loan eligibility … and sometimes it doesn’t make a bit of difference in terms of aid. The change affects the EFC itself, and that means that it would change it for federal aid eligibility. There are times a student can become Pell eligible due to PJ. And yes, the eligibility would be for that school, only.</p>
<p>So, if the officers uses PJ and adjusts some elements and it changes EFC, then it only changes EFC for that ONE school? So, a student could end up with several different Fafsa EFCs at various schools…and be eligible for Pell at one school and not another?</p>
<p>Yes, that could happen. The PJ EFC is only good at the school that did the PJ. Other schools can make the same adjustment, but it would be on their own, based on information available to them.</p>
<p>My wife died recently and the term life insurance payout is substantial. Because of her sickness and death my income is down substantially.
Next year I will have three kids in private colleges,
My plan is to not to collect that $ for the next four years (leave it with the ins co.) OR to change the beneficiary to my oldest child who is out of college and in mid 20s.
Questions:
Is this an effective strategy?
Is it unethical?</p>
<p>Thanks much!</p>
<p>The money is treated the same whether you leave it with the insurance company or not. It’s still constructive receipt, you’re just choosing to leave it with the insurance company (at interest) instead of a bank. You cannot change the beneficiary after death. Whoever is listed as bene on date of death must get the money.</p>
<p>First, please accept my condolences for the loss of your beloved wife.</p>
<p>What kind of schools will your children be attending? Do they “meet need”? Can you contact each one about this special circumstance and see if they’ll make an adjustment?</p>
<p>Do you have outstanding med bills from your wife’s illness? </p>
<p>Since you said that your income has been down substantially, don’t you need some of this money to catch up and make ends meet?</p>
<p>Wow, sorry for your loss. What a tough situation regardless of the money part.</p>
<p>What Chardo said is partly true - once you file the death claim with the insurance co. it’s your money, regardless of whether it’s with the insurance co. or moved to a different account. Now, technically it’s NOT your money until you file for it, so not sure if that’s been done yet but you’ll need to within whatever period the Ins. Co. says. </p>
<p>However, you ARE allowed to disclaim any inheritance so assuming you are the primary beneficiary, you can disclaim whatever portion you choose. The caveat is that you do NOT get to decide who then gets the rest - it goes to the secondary beneficiary(s) or the estate if none are listed. Usually, the 2ndary benes would be the kids anyhow so I doubt that would help you much for college aid.</p>
<p>The insurance co. may offer other settlement options rather than “lump sum”. An annuity; a 5-year payout; etc. However, be careful here as to which would allow you to include or not include the part not yet paid out on FAFSA or Profile if your kids’ schools use it. </p>
<p>I guess you could gift the $$$ to the older son - but man, that’s going pretty far to avoid including it on aid apps. Also, as far as ethical goes, that’s a tough one. You’re in a tough situation, however, many parents have the life insurance to cover this situation - where the kids aren’t through college yet and will need the $$$ to finish. </p>
<p>Good luck.</p>
<p>
</p>
<p>An insurance payout is NOT an inheritance, so this would not apply. As Chardo indicated, a life insurance beneficiary cannot be changed after the policyholder’s death.</p>
<p>Just to make sure there’s no confusion, yes, the primary beneficiary of an insurance policy CAN disclaim the inheritance and leave the money to the secondary beneficiary(s) - if any are listed. We’ve done it several times with clients for estate planning reasons. Same is true for IRA/401K/Annuity - anything with a designated beneficiary. You’d need to complete either the insurance company’s disclaim form or a letter from you (usually involving an estate planning attorney, but not mandatory).</p>
<p>I’m not saying this is the smart thing to do in this case, just pointing out it is an available option.</p>
<p>If the kids are already in school you might ask each school how they view it. It seems some schools do not view the proceeds as income, but rather as an asset. If that were the case w a FAFSA school, you could do thibgs like payoff your home and other debts, then declare only the remaining funds.</p>
<p>Another question to ask is if you take an annuity settlement. As I understand it, the lump sum in the annuity does not get entered on FAFSA, so it would only be the income received which you would disclose, with a deferred annuity, that could be zero.</p>
<p>Profile schools will have their own rules</p>
<p>I do recognize that this is an old thread. However, I called FAFSA the other day and was told that there is not even a spot for this on the FAFSA, and it’s not considered as either income nor an asset. He told me it doesn’t not affect the student’s ability to obtain grants.</p>
<p>This IS an old thread. If the money idiom the life insurance payout is IN a bank account the day the student files their FAFSA, it is counted as an asset like ANY other money that is IN a bank account.</p>
<p>So Irene Joy…if you got a life insurance check, and it’s in your bank account when you file the FAFSA, you MUST include that money in the bank account total. You can’t just subtract that amount from your account balance.</p>
<p>Simply put…if you receive $100,000 in a life insurance settlement, and you have that $100,000 in your bank account the day you file your FAFSA, you MUST include that amount as an asset.</p>