FAFSA asset reporting: Should student spend refund money before applying?

Student assets are assessed at a higher rate than parent assets on the FAFSA. Under the new SAI formula, student assets are assessed at 20% while parent assets are only assessed at a rate between 2-10% depending on your income level. So yes, having $4,800 sitting in his account on the day you file could potentially increase his SAI by nearly $1,000, reducing his aid eligibility.

we had the EXACT same situation last year w/ my daughter!! the financial aid office told us student cash is definitely counted but paying rent ahead isnt considered "hiding assets" or anything sketchy because its a legit expense he was going to pay anyway. just keep the receipt incase they do verification

This is a common concern, but there are a few important points to understand: 1. The FAFSA takes a snapshot of assets on the day you file - not before or after 2. Legitimate expenses like paying rent early is perfectly acceptable 3. Student assets impact the SAI calculation at 20% (so $4,800 = approximately $960 in potential aid reduction) 4. Consider timing your FAFSA filing after major expenses have been paid 5. Don't empty accounts just for FAFSA purposes without documentation of legitimate expenses If your son was planning to use that money for rent anyway, having him pay it before you file is a legitimate strategy. Just make sure he keeps documentation of all payments.

does the FASFA even ask for bank info anymore?? I thought with the new formual they stopped carin bout small amounts?? so confused

The entire FAFSA system is RIGGED against middle class families!!! My daughter had $3,200 in her account from her SUMMER JOB and they counted every penny against her! Meanwhile her friend whose parents make WAY MORE than us qualified for grants because they keep all their money in their names not hers. The system PUNISHES students who work hard and save!!!! It's absolutely INFURIATING how they pretend to help students but actually PENALIZE responsible ones!!!!

When I tried calling FSA about asset questions last month, I spent like 2 hours on hold and kept getting disconnected. So frustrating. I finally used this service called Claimyr (claimyr.com) that someone on here recommended - they got me through to an actual human at FSA in about 20 mins. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ. The agent I spoke with confirmed that using refund money for its intended purpose (like paying rent) before filing FAFSA is completely legitimate. Worth the call to get that peace of mind.

i forgot to mention earlier - if u decide NOT to pay rent early make sure the refund isnt sitting in a high-interest savings acct!! we made that mistake an it counted as both asset AND income from interest lol every dollar counts with these formulas!!

One additional point worth mentioning: the timing of when you file the FAFSA can matter. If you file early (October), many schools still have all their institutional aid available. So while paying rent in advance might reduce his SAI slightly, delaying FAFSA submission too long could potentially cost him more in institutional aid opportunities. Many schools award first-come, first-served for certain funds.

Since no one has mentioned this - remember that if you're selected for verification (which happens randomly to about 25% of FAFSA filers), you may need to provide bank statements showing the balance on the day you submitted your FAFSA. If there's a large withdrawal right before filing, be prepared to document what that money was used for. Legitimate expenses like rent are fine, but it's important to keep records in case of verification.

my cousin paid all his rent upfront last year and got more financial aid lol so def do it

Just wanted to add my experience from this year - we were in a similar situation with my daughter having about $3,500 in refunds sitting in her account. We decided to pay her spring semester textbooks and supplies early (around $800) and prepaid her meal plan for the next semester ($1,200). Both were legitimate expenses she was going to have anyway, and it brought her reportable assets down significantly. The key is to only spend on things you were already planning to purchase - don't go buying unnecessary items just to reduce the balance. Her financial aid package this year was noticeably better than last year when we didn't think about asset timing. Good luck with your decision!