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you know there may be loan forgiveness coming right??? shoulda waited maybe??? biden was talking about canceling like $10k for everybody, coulda saved some of that settlement money
The latest FAFSA loan forgiveness proposals are currently held up in court, and there's no guarantee when or if they'll be implemented. For someone going through adoption qualification where timing matters, waiting for potential forgiveness that might never come isn't practical advice. Plus, adoption agencies want to see actual debt reduction, not potential future reduction.
Congrats on being debt free!!! Quick question - did you have to pay taxes on your settlement? And will you have to pay taxes on the loan payoff? I know sometimes debt cancellation is considered taxable income, not sure if this is the same situation.
Great question. Personal injury settlements are generally not taxable income at the federal level. And since this wasn't debt cancellation but rather a complete payoff using personal funds, there's no tax implication for the loan payoff either. The OP essentially used their non-taxable settlement to pay a debt, which doesn't create a taxable event. However, state tax rules can vary, so it's always good to consult with a tax professional.
Thank you all for the helpful suggestions! I'm going to try negotiating with the financial aid office and will check out those resources for finding schools with better aid policies. My son and I are sitting down this weekend to look at all his options, including potentially starting at community college. It's frustrating that the system is so complicated, but at least I feel like we have some paths forward now.
The student loan forgiveness you're seeing is ONE TIME relief for people who've been paying for DECADES on predatory loans with interest rates that meant they owed MORE than they borrowed even after years of payments. It's not like people are just getting free money while your son gets nothing. But yeah, the FAFSA this year is a DISASTER. My daughter's application has been "processing" for over 2 months with no explanation. The schools can't package aid without the FAFSA data and the May 1 deposit deadline is coming up fast. HOW are families supposed to make decisions with no financial information??? The whole system needs to be rebuilt from scratch. Until then, we're all just trying to navigate a broken system the best we can.
Just want to add - sometimes the FSA system shows that verification is needed even when it really isn't! It's worth checking your actual SAI (Student Aid Index) number on your dashboard. If you have an SAI displayed, that means your application was actually processed despite the verification notice.
Everyone here is overthinking this. Just submit the FAFSA without the parent info and then add it later. That's what I did and it worked fine.
This is incorrect advice. Submitting without required parent information will flag your application as incomplete, and many schools won't consider incomplete applications for priority deadlines. Please don't follow this suggestion as it could jeopardize your financial aid package.
Just fyi when I graduated my last semester i only needed 2 classes and financial aid wouldn't cover it because I wasn't full-time anymore. Had to take out a private loan. Super annoying. Check if there's a minimum credit requirement for whatever aid he's been getting.
Since we're in 2024 now, I want to clarify some information about the 2025-2026 FAFSA that wasn't mentioned yet: 1. The 2025-2026 FAFSA will follow the new simplified FAFSA format that launched this year 2. It should be available December 1, 2024 3. Your son's SAI (Student Aid Index) will be calculated, not EFC 4. Since it's his final course, make sure his graduation date is correctly listed File the application as soon as possible after it opens to maximize his aid eligibility. Even for one course, it's worth completing if he's been eligible for grants in the past.
Aria Park
That's good progress! The payment plan is a smart backup. One additional suggestion - make sure to check if your school has emergency grants available. Many institutions have funds specifically for situations like yours where there's a gap between expected aid and current charges. These grants often don't need to be repaid and can help bridge the timing gap while your reevaluation is being processed. Also, verify that your reevaluation will actually make a significant difference in your SAI score. With the new FAFSA formula for 2025-2026, income changes affect your aid differently than in previous years. The financial aid office should be able to give you an estimate of how your revised SAI might impact your total aid package.
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Ethan Anderson
•Thank you! I hadn't thought about emergency grants. And to be honest, I have no idea how much my SAI might change - the financial aid counselor we initially spoke with just said we should definitely apply for reevaluation based on my dad's job loss, but didn't give any estimates. I'll specifically ask about the potential impact on my SAI when I follow up tomorrow.
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Alexander Zeus
When my cousin had this happen, his mom went to the Dean of Students office and explained the situation. Apparently they have some power to intervene in these cases and can put a hold on the administrative drop while things get sorted out. Might be worth trying that angle too.
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