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Author Topic: At what point do you *not* send in the FAFSA/need-based AID form?  (Read 1078 times)

snikrep

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Does anybody know at what point schools will not consider you for need-based aid based upon home equity, salary from a spouse, outside income, etc.?  I'm talking about specific numbers, obviously - just curious :P.

notfamous

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Re: At what point do you *not* send in the FAFSA/need-based AID form?
« Reply #1 on: December 29, 2005, 08:46:21 AM »
There's a calculator at http://www.finaid.org (I think that's the right address, if not it's something close)

You can enter all sorts of different scenerios and figure out some rough estimates of your expected contribution. I discovered that thanks to my attempts to be a good girl and save for my very-far-in-the-future retirement, I don't think I'll qualify for anything. Do people really cash in their 401ks for law school? That seems like a pretty dumb idea unless your credit is so bad you can't get loans.

That said, I'm pretty sure that a lot of schools won't consider you for some types of merit aid if you don't submit the forms, so I'm planning on doing it anyway. I'm just not counting on getting anything.

Slow Blues

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Re: At what point do you *not* send in the FAFSA/need-based AID form?
« Reply #2 on: January 01, 2006, 11:23:41 AM »
Don't know the cut-off and I'd figure it's probably pretty high, but it's worth submitting anyway. You never know.

Some people do cash in their 401ks. I considered it briefly but I'd rather let the money grow for 3 years. Even people with bad credit can get some kind of loan.

LawyersGunnersnMoney

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Re: At what point do you *not* send in the FAFSA/need-based AID form?
« Reply #3 on: January 05, 2006, 01:42:51 PM »
ive thought about using my 401k.  i strongly believe the markets will be unkind while im in law school but i dont rely on my crystal ball enough to take the chance...

if someone uses their 401k for their own education, how do the taxes/penalty work?  taxed at lowest rate and no 10% penalty?

Slow Blues

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Re: At what point do you *not* send in the FAFSA/need-based AID form?
« Reply #4 on: January 05, 2006, 02:01:36 PM »
ive thought about using my 401k.  i strongly believe the markets will be unkind while im in law school but i dont rely on my crystal ball enough to take the chance...

if someone uses their 401k for their own education, how do the taxes/penalty work?  taxed at lowest rate and no 10% penalty?

Correct. No penalty since college education is an eligible expense. Is it subject to income tax though?

Would agree with you. The market will probably be flat or take a good slide. You could just re-weight your portfolio to mimimize the impact.

Typhoon Longwang

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Re: At what point do you *not* send in the FAFSA/need-based AID form?
« Reply #5 on: January 05, 2006, 11:37:06 PM »
According to Ivey, schools can see where else you've submitted your FAFSA.  That may be the only way they know who they're competing against for you.  It might be worth submitting the FAFSA to your schools just so they know and might choose to sweeten the deal with merit scholarships.  Plus, you can't get federal loans without the FAFSA...subsidized Stafford is one of the sweetest loans around (especially if you go for additional education) and both subsidized and unsubsidized stafford loans are just above prime and capped at 8.5%.  Unless you or someone you know is paying for your LS out of pocket, I can't imagine a better lending channel.

snikrep

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Re: At what point do you *not* send in the FAFSA/need-based AID form?
« Reply #6 on: January 05, 2006, 11:58:24 PM »
My question is whether there is merit-based aid that has a small need-based component (I'm thinking that UVA does this, although I'm not sure).

Is it really true that a house is not counted in aid calculations?  If people have savings, it seems like it'd make sense to dump everything into a house to get the maximum amount of aid.

notfamous

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Re: At what point do you *not* send in the FAFSA/need-based AID form?
« Reply #7 on: January 06, 2006, 08:19:39 AM »
Home equity is not used to calculate your federal aid (which is done with the FAFSA), but many schools do use it to determine eligiblity for institutional aid (which is done with need access or other school-specific forms).


LawyersGunnersnMoney

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Re: At what point do you *not* send in the FAFSA/need-based AID form?
« Reply #8 on: January 06, 2006, 10:40:50 AM »
ive thought about using my 401k.  i strongly believe the markets will be unkind while im in law school but i dont rely on my crystal ball enough to take the chance...

if someone uses their 401k for their own education, how do the taxes/penalty work?  taxed at lowest rate and no 10% penalty?

Correct. No penalty since college education is an eligible expense. Is it subject to income tax though?

Would agree with you. The market will probably be flat or take a good slide. You could just re-weight your portfolio to mimimize the impact.

right, im planning on just reallocating my portfolio.  but if the markets are flat or down, then obviously the advantage of compounding returns is gone.  still going to stick it out though

trout

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Re: At what point do you *not* send in the FAFSA/need-based AID form?
« Reply #9 on: January 10, 2006, 04:34:39 PM »
When you take your money out of the 401k it will be taxed at your marginal tax rate since it is taken out pretax orginally.  So, if you don't make any money your first year of law school then it will be taxed at the lowest rate.