Quick Financial Aid Question

[melicertes]

I am planning on buying a car soon and have 20+K from saving over the last two years (I don't want to make payments so I am going to pay it off upfront).  I don't think that I will be able to buy the car before I apply for financial aid, but I'm worried that this money is going to make me look a lot more financially secure than I really am.  Does anyone know if this will significantly increase my EFC and is there anyway to avoid getting punished for being responsible with my money?

[Erapitt]

If its in savings and you report it then it will drastically affect your EFC.  Either a) you don't report it. 
b) withdraw the money for now.

[melicertes]

How unethical would it be to not report it?  It is essentially a prepaid expense, since I have already set the money aside for the car...

[xindogu]

If you are worried about not reporting money that is in your account, why not "lend" it to a family member or friend for a while?

Just make sure you trust that person....

[Erapitt]

Agreed.  Just give the money to your folks.  I mean technically you have to report it.  My wife and I reported our savings which we are saving for a down payment on a house.  Thats just the way it is.  My EFC ended up being over 25K.  Stuff happens.  If you don't report it, you likely won't get caught.  If you do get caught though that is bad news. 

For me, it wasn't an issue because I don't need grants.  However, in your shoes, I would recommend pulling the money.  I mean in reality, you really don't deserve the grants if you have 20K in savings.  Buying a car so you can abuse the financial aid system is why so many people that actually need aid don't get it.  You should be using that 20K to pay for school.

[melicertes]

Thanks for the advice, although I don't feel that I am trying to take advantage of the system.  Since I have a family, a car is a necessity, and the one I have now is 15 years old and fading fast.  I certainly could have bought something a year ago on loans, saved nothing, and been rewarded for being poor and in debt, but I try to be a little more responsible with finances.  I'll likely report the money because it's the right thing to do, but it seems stupid that I am being punished for not living beyond my means. 

[Erapitt]

I totally agree with you about it being unfair, but its the way it is.  I think the system sucks.  People that need aid don't get it and its a shame.

[melicertes]

If only I could buy a $20,000 gift card at the Honda dealership, this wouldn't be a problem

[cayberr]

Yes, a $20k gift card from Honda would be lovely.  I wouldn't mind one of those.  I'd buy myself a new CRV. 

Whatever you do, get rid of the money before you complete the FAFSA.

[dmb]

FWIW - I processed the FAFSA and inadvertently left off my balances in cash/checking/savings.

When I realized what I had done, I went back in and corrected it - adding $9,000 in cash/checking/savings.  The EFC didn't change at all after I added the $9,000.

Maybe I just didn't make enough to begin with - but I would have thought that an additional $9K would have increased the EFC.