Financial Aid - Dumb Question

[jvan2619]

Ok, I'm in the process of filling out my FAFSA and was hoping that someone could give me some guidance. 

I'm guessing that I won't be eligible for the federal financial aid programs, but we were hoping to handle law school through private loans - so we thought.  Is it possible to get private loans if you actually have money in different forms to pay for it???

In another post, someone had mentioned that they weren't eligible for loans due to his amount in savings, so I am starting to freak out!  Not that you probably care , but here is our basic situation:

-  For the last 3 years, we've only had my income...hubby started his own business that didn't work out
-  When we move for school, I will no longer be working, but he will be taking home almost the exact same amount that I previously got
-  We have a daughter
-  Just sold our house...kept all of the "profits" to put towards another house, but right now it is money in the bank
-  Hubby has a trust fund that we can't pull from BUT it is in his name
-  Savings of about $50k
-  Substantial 401ks
-  IRAs

Any advice for how to use the FAFSA to my advantage?  HELP!

[cayberr]

-  Just sold our house...kept all of the "profits" to put towards another house, but right now it is money in the bank
-  Hubby has a trust fund that we can't pull from BUT it is in his name
-  Savings of about $50k
-  Substantial 401ks
-  IRAs

You certainly won't be getting any need-based aid since you're doing great financially.  As for private loans, lenders are more concerned with your ability to pay back the loan.  Considering your financial situation, you should be fine from that angle.

Sidenote, you have to declare your spouse's assets even if it is in his name alone. Regarding the 401k and IRA, they aren't calculated as assets for FAFSA purposes.

[upNdown]

-  Just sold our house...kept all of the "profits" to put towards another house, but right now it is money in the bank
-  Hubby has a trust fund that we can't pull from BUT it is in his name
-  Savings of about $50k
-  Substantial 401ks
-  IRAs

You certainly won't be getting any need-based aid since you're doing great financially. 

Don't be so sure.  The OP said they'd been living off a single income.  If that income is low enough (I'm guessing somewhere in the 30K range might be low enough), with 2 dependents, that might turn out a very low EFC.  Play with the EFC calculators, you might me surprised . . .

[jvan2619]

Ahhhh...where do I find an EFC calculator?

Thanks guys for the info!

[Phatmal]

They don't ask you about any savings other than checking and savings accounts.  You do not need to declare your 401k, IRA, or equity in your house.  This turned out great since those investments are the bulk of my net worth.  If I remember correctly, they didn't even ask me what my mortgage payment is.  It took me a total of 10 minutes to fill out the application.  Got an EFC of 14k.

As for private loans, it's the same as any other loan, your debt to income and that sort of thing.  I would assume as long as you don't have a huge mortgage or multiple car loans, you should be fine.  The interest rates most likely won't be as good and I don't know if they delay repayment until after graduation or not.

Why not consider a home equity loan?  The only drawback that I found was that we would have to start repaying immediately and with one income and our current mortgage, that would be stretching things a bit.  Just a suggestion though.  Private loans almost seem like you are putting school on a credit card to me.

[jvan2619]

Remember how I said that my hubby's business hadn't done well?  WELL, I found a calculator and because our "Adjusted Gross Income" due to business losses was $3k it said that my family contribution was $0!!!!

Can this be right?  It didn't even ask me for savings account info after that point.  I plugged in my actual income in that spot and was subsequently asked for all of my personal account info...kicked out that I wasn't eligible at all.  BUT if my AGI was $3k it was a different story entirely. 

Seriously - does this sound right?

Sorry for the weird questions...

[Phatmal]

Sounds right to me....the only thing that will trip you up with the feds is the money that you have in the bank from your house.  They are not looking at net worth...just liquid cash assets. 

[jvan2619]

Damn!  Maybe I should buy dbk10 the ring for his girlfriend?  Just kidding.  Guess I could buy myself a new ring?  Kidding again. 

Will schools individually ask for that info?

[upNdown]

Remember how I said that my hubby's business hadn't done well?  WELL, I found a calculator and because our "Adjusted Gross Income" due to business losses was $3k it said that my family contribution was $0!!!!

Can this be right?  It didn't even ask me for savings account info after that point.  I plugged in my actual income in that spot and was subsequently asked for all of my personal account info...kicked out that I wasn't eligible at all.  BUT if my AGI was $3k it was a different story entirely. 

Seriously - does this sound right?

Sorry for the weird questions...

Told ya!
As far as I can tell, this probably means you'll get good government subsidized loans.  As far as all that money in savings - probably some schools will consider it and some schools may not.  But unless you're prepared to buy a house with that money, than you have no choice but to go ahead and tell them about it.  So, do your fafsa and then start filling out the financial aid forms for each school.  What are you waiting for?  These schools have limited amounts of money to give out.  The sooner you complete your financial aid paperwork, the better chance you'll have at getting money (or more money) out of them.

[cayberr]

-  Just sold our house...kept all of the "profits" to put towards another house, but right now it is money in the bank
-  Hubby has a trust fund that we can't pull from BUT it is in his name
-  Savings of about $50k
-  Substantial 401ks
-  IRAs

You certainly won't be getting any need-based aid since you're doing great financially. 

Don't be so sure.  The OP said they'd been living off a single income.  If that income is low enough (I'm guessing somewhere in the 30K range might be low enough), with 2 dependents, that might turn out a very low EFC.  Play with the EFC calculators, you might me surprised . . .

Thanks for the correction.  I'm so used emptying my accounts come FAFSA time that I've been under the impression that assests compose a big chunk of EFC.