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FAFSA and savings


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I was reading through a thread on a another forum, which brought up a question for me. I currently have a Junior. In regards to the FAFSA, it seems as though they look heavily at parents income, but maybe not as much at savings. I am a widow. Since my children are both minors, I receive a social security payment each month. It is deposited directly into my checking. Because we don't need to use that for monthly expenses, I transfer that money each month into savings accounts in their names. Would it be better if that money were in an account in my name? I never really thought about it before, because my intent was always to use that money for college.

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Thanks ladies. I wonder, though, because I realized I wasn't quite clear in my original post. The money we receive from social security is actually a death benefit my children each receive due to my husband's death. I don't receive anything myself. But it goes into my account and I have full control of it since they're both minors. I'll go ahead and designate the money differently because it certainly won't hurt. I have to tell the government each year how it was used, so they will have a record of it going to savings. This might be beyond the scope of anyone on this board, but I appreciate the help. I just want to maximize financial aid options, while being completely above board about it.

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My understanding is that the money can be used in a variety of ways, as long as it is for children's benefit -- that includes food and housing. I have never heard of anyone having to take a grocery bill and divide it up, thank goodness. So you could use the money for ongoing expenses now, the give your children something from your own savings later, if you wanted them to have a nest egg. I am not sure if the social security benefit money could be used for a 529, but I don't think you could have a savings account in your name.

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Thanks for the input. I think for now I will put the money into my personal savings account, and wait to see what kind of records I have to give. My understanding was that it's a short form with just 5 questions and I don't have to supply any proof. I can probably better determine my best course when I get it.

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Thanks for the input. I think for now I will put the money into my personal savings account, and wait to see what kind of records I have to give. My understanding was that it's a short form with just 5 questions and I don't have to supply any proof. I can probably better determine my best course when I get it.

You might want to double check about putting funds into your personal account, unless you are using the money now for ongoing expenses. The Representative Payee Report will ask for if the funds are in child's name. If not, you will have to give details of the account. There are a number of Representative Payee Reports; I could not find the child one online.

 

It's easy to set up an UTMA account for a child. You could the transfer the money to your account for expenses, put it into an investment account for a child, or leave it in the UTMA. Your way may be perfectly ok, but, in your position, I would want to double check.

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Ok. Since I'll only get one more payment this year, I'll just transfer the money to their savings as I have done and wait to see what kind of reporting I have to do. I can make a decision later. The thing is, they set it up to be automatically deposited into my checking. So I actually go in each month and request a transfer. I'll dig out the paperwork to see if it gives any more guidance. Honestly, while I'm thankful for the peace of mind it gives, the whole situation just makes me so sad.

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