Will grandparents paying tuition reduce our FAFSA aid and Pell Grant eligibility?

Great question! The timing of grandparent contributions matters enormously. Under the FAFSA Simplification Act, grandparent contributions paid directly to the college no longer count as student income. This is a huge change from the old FAFSA rules! However, if the grandparents give the money directly to your son and then he pays tuition, that WOULD count as student income on the next year's FAFSA and could reduce aid eligibility. The best approach is for the grandparents to either pay the school directly after all financial aid is processed or wait until senior year when future FAFSA applications won't be affected.

Watch out!! My sister's kid had grandparents help with tuition and it TOTALLY screwed up their financial aid the next year!!! The financial aid office counted it as income and their EFC (now SAI) went wayyyy up. They lost like $7000 in grants!!! Maybe the rules changed but BE CAREFUL!!

my grandpa helped me with school too. he just waited til after fafsa stuff was done each yr and then paid part of whats left. worked fine and i still got my pell grant every semester 👍

This is an important planning opportunity! Under the current FAFSA rules (starting with 2024-2025 aid year), contributions paid directly to the institution by anyone other than the parents/student don't impact the SAI calculation. However, it's still important to consider the college's institutional methodology. Some private colleges using the CSS Profile may still consider these funds differently than the FAFSA does. My recommendation: have the grandparents pay after the financial aid package is finalized, and always directly to the institution rather than giving it to your student or you first.

slighlty off topic but make sure ur son checks if his school requires both the FAFSA and the CSS profile. my kid didn't realize and missed out on institutional aid freshman year bc we only did FAFSA.

Have you tried calling Federal Student Aid to get a clear answer on this? I was trying to get through to them with questions about my daughter's verification process for WEEKS and kept getting disconnected. Finally found this service called Claimyr that got me through to a live agent in under 10 minutes. Check out their video demo at https://youtu.be/TbC8dZQWYNQ and their site at claimyr.com. Totally worth it to actually speak to someone who can answer your specific situation about the grandparent contributions.

I work in a financial aid office and want to add some nuance here. The FAFSA Simplification Act DID remove the requirement to report grandparent contributions as student income, which is great news for you. HOWEVER, some schools will still ask about these contributions through their institutional aid applications. The best approach: 1. Complete FAFSA without mentioning potential grandparent help 2. If schools require the CSS Profile, answer questions about external support honestly 3. Wait for ALL aid packages to be finalized 4. Have grandparents make payments directly to the school 5. If possible, have them help with the final year of college to avoid any impact on future aid calculations This strategy maximizes federal aid while being honest on institutional applications.

The whole system is RIDICULOUS!!! Why should families have to jump through all these hoops just to get aid their kids deserve??? My nephew's grandparents wanted to help too and the financial aid office told them completely different information than what the FAFSA website said. No wonder everyone's so confused!!

Thank you everyone for all the helpful advice! To summarize what I've learned: 1) Under new FAFSA rules, grandparent contributions paid directly to the school won't affect our federal aid like Pell Grants 2) We should wait until AFTER all financial aid packages are finalized before grandparents make any payments 3) Some private schools using CSS Profile might still consider these funds differently 4) It's better to have them contribute in later years of college to minimize impact on future aid cycles. I'll make sure to discuss this carefully with my parents so we handle it correctly. Really appreciate all the guidance!

One additional tip that might help - consider having your parents set up a 529 education savings plan with your son as the beneficiary if they haven't already. Contributions to a grandparent-owned 529 don't count as assets on the FAFSA, and qualified distributions directly to the school also won't impact aid calculations under the new rules. This could be a great way for them to help with future years' expenses while maintaining maximum financial aid eligibility. Just make sure they understand the gift tax implications if they're contributing large amounts!

This thread has been incredibly informative! As someone new to navigating FAFSA, I'm grateful for all the detailed explanations about the new rules. I have a similar situation with my daughter starting college next year, and her grandparents also want to help. Based on what I've read here, it sounds like the key takeaways are: wait until after aid packages are awarded, have them pay directly to the school, and be aware that CSS Profile schools might handle things differently. One question I have - if grandparents want to help with expenses beyond tuition (like room and board or books), does the same rule apply about paying the school directly? Or is it better for them to handle those costs in a different way?

This conversation has been so educational! I'm a parent of a high school junior and we're just starting to think about college financing. My mother-in-law has mentioned wanting to help with our son's education expenses, so this timing is perfect. From what I understand here, the new FAFSA rules are much more favorable than the old system where grandparent help could really hurt aid eligibility. I'm planning to bookmark this thread and share it with my mother-in-law. One follow-up question - when you all mention "waiting until aid packages are finalized," does that mean waiting until the student has actually chosen a school and accepted their aid package? Or just waiting until you've received offers from all the schools? I want to make sure we time this correctly so we don't accidentally mess up our aid eligibility.

As a newcomer to this community, I want to thank everyone for such a thorough discussion! I'm in a very similar situation with my daughter who will be starting college in fall 2025, and her great-grandmother wants to contribute to her education costs. Reading through all these responses has been incredibly helpful in understanding the new FAFSA rules. I especially appreciate the clarification about the timing - waiting until aid packages are finalized before any payments are made seems like the safest approach. It's reassuring to know that under the FAFSA Simplification Act, direct payments to the school won't hurt our federal aid eligibility the way they used to. I'm definitely going to share this information with our family members who want to help. Thank you all for creating such an informative resource!

As someone new to this community and the FAFSA process, I'm incredibly grateful for this detailed discussion! My son will also be starting college in fall 2025, and his grandparents have expressed interest in helping with costs. This thread has been a goldmine of information about the new FAFSA Simplification Act rules. I'm particularly relieved to learn that direct payments to schools won't impact federal aid eligibility like they used to under the old system. The strategic timing advice - waiting until after all aid packages are finalized before any grandparent payments - seems crucial. I'm also taking note of the CSS Profile considerations for private schools, since that's a different set of rules we'll need to navigate. One question for the group: for families applying to a mix of public and private schools, would you recommend having the same conversation with financial aid offices at each type of institution to understand their specific policies? I want to make sure we're not missing any nuances between federal aid rules and individual school policies.