Sandy asks…
How does my life insurance benefit affect my Fafsa?
My father died several years years ago and I received a life insurance benefit which is being held in a bank somewhere until I turn 18. The amount is about 25,000 so how does this affect my FAFSA, since I’m filling out this week. Will I still be eligible for financial aid?
Is there anywhere I could find more information on this?
Michelle answers:
You must report all your income and assets on the fafsa. Yes, it will effect you. There are several questions on assets. Read them carefully to figure out which question this 25,000 would be reported.
If it’s just in a savings account, you would put it under “How much do you have in cash, savings and checking accounts?” or if it is in some sort of investment program, you might list it under, “How much do you have in investments?” Investments are stocks, bonds, CDs, money market funds etc. It really depends on how the account is set up as to where you report it on the fafsa.
Yes all income and assets effects your fin aid, but it will not STOP you from getting aid. Anyone can get aid regardless of income or assets in the form of student loans.
Mandy asks…
Do you add schools to your fafsa before or after acceptance?
I decided to skip fall semester and wait till spring. When applying in Fall ’11 for Fall ’12 there is a lot of time in between and the FAFSA isn’t due untill the beginning of the year.
Michelle answers:
I don’t think you can get financial aid for Fall 2012, that is unless you are attending right now and apply as soon as possible. If you are planning to go for spring 2013 (January or Feburary of next year) the same financial aid applies so you are supposed to be filling it out now instead of asking ? On internet
However if you choose to start NEXT fall, yeah, you don’t have to fill out a fafsa until January of next year. That is unless you want to pay out of pocket
John asks…
Is FAFSA form required to be filled by International Students applying for US Colleges to receive scholarship?
I am an international student applying for my undergraduate engineering in US.
I found, in the colleges websites that it requires FAFSA form to be filled to be eligible for financial aid?
But I am confused that, is it for only the US citizens, or even the International student should fill the FAFSA to get the scholarships?
Michelle answers:
If the university requires the FAFSA to be eligible for financial aid, it means that international students are not eligible. If this is a state university, that is quite common. Get in touch with them to clarify.
Mary asks…
Has anyone purchased an Annuity for the sole purpose of hiding money from Colleges on the FAFSA application?
In researching reasons to purchase anuities, no one has on their list of reasons, to hide money so it does not appear on the FAFSA college form. The less money you have the greater the possibility of you receiving more aid from a college for your child. An annuity is one item that does not need to be declared on the FAFSA form. Has anyone else done this and what were the results from the colleges as far as granting aid? Also what type of annuity(s) did you purchase?
Michelle answers:
It is true that you do not have to include the value of annuities in parent asset questions of the fafsa. Remember this is also true of retirement plans and the equity in your house.
I think you need to realize the Dept of Ed calculates the majority of a students EFC based on income, not assets. Those with higher incomes do not qualify for federal grants but are offered federal loans only. It is my experience, that if the parent has enough money to have the option of investing in this manner, the annual household INCOME will still be too high to get them grants, and shifting and changing isn’t making much difference. However, every family situation is different so I’m certainly not telling you not to check it out.
Oh, and if you DO decide annuities are right for you and then have distributions during that year they would be included on line 16a of your Income tax return, thus being included in your AGI, thus being used in calculating the students EFC. (The value is not reported, just the pay out).
Hope this makes sense..
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