college residency and fafsa/tax implications?

[MKCP5]

So, kinda complicated, and in the middle of tax season our tax preparer doesn't really have time to investigate this. Hoping one of you has some knowledge
DD is deciding on a college. We are a hard working family but cannot pay for school for her. She will rely on her own savings, loans, financial aid and scholarships.
Here's the question. Out of state tuition to her top choice school is MUCH higher than in state. (TRY 18K DIFFERENCE) My brother lives in state to that school. She could establish residency with him this summer, pay out of state her first year, live there in the summer and work, and be a resident for her 2nd year.
Can we still claim her on taxes? Does her fafsa still have us on it? She won't be living with us any longer but we will be sending her help as we can financially. I don't want to do anything illegal, and I want her to get the best financial aid benefit she can.
Anybody understand what I am talking about? haha thanks!

 

[lastminutemom]

Have you spoken to someone at the college that has confirmed your plan is viable? When I went to college, 20+ year ago, there were some states that made it fairly easy to establish residency. This has mostly changed.

Most states base residency on where the parents live, until a child is 24. Until she is 24, she will be required to put your information on FAFSA, etc and that will obviously include your home state etc.

And even at that point, a student has to be fully self supporting for a year to establish residency.


Again, your first step needs to be to talk to the college in question.

 

[MKCP5]

We will talk with them when we go to visit in a couple of weeks.

It's tough though. I feel as if she will be self supporting. We are not paying for college, she is. If she lives away for summers, she will give $$ for room and board to my brother from her summer earnings. Yes, I might send her $100 occasionally as a gift, but we won't be supporting her.

 

[trip]

It really depends on the school. One of my DD's friend did this but he had to live and work in the new state for a full calendar year without going to school and his parents couldn't claim him on their taxes any more.

The schools website should address this issue.

 

[4HppyCamprs]

Go to Fafsa.edu.gov and check out the application and requirements. Establishing independence in the eyes of education is harder than in the "real" world.

Sent from my iPhone using DISBoards

 

[Hannathy]

Her financial aid will be totally dependent on your income until she is 24 no matter how much you give her. Or where she lives. Her loans and grants will be based on your income.

Each school/state has their own residency requirements but it is usually more complicated than your plan or every kid who gets an apartment would be able to say they were state residents. The school or state should have the info on a website somewhere

 

[tvguy]

Can we still claim her on taxes? Does her fafsa still have us on it? She won't be living with us any longer but we will be sending her help as we can financially. I don't want to do anything illegal, and I want her to get the best financial aid benefit she can.
Anybody understand what I am talking about? haha thanks!

If you are providing over 50% of her support, you can claim her on your taxes. But it would appear in this sitution.......if she is paying tuition of that amount, that she is providing over 50% of her support, so you would not be able to write her off. To grossly over simplify, if you want the deduction, you have to be paying the bills.

Residency rules are going to vary from state to state and college to college.

 

[akcire]

She maybe able to get in state residency rates immediately by only attending part time. If she attends part time up to 11 hours for both long semester sand then takes an additional 6 summer hours she would be on track and not have to ever pay an out of state tuition rate. Of course this is state dependent

If your not proving 51 percent of her support, you can't put her on your taxes. She will need to claim herself with any income she has and will probably qualify for a personal education credit and her own EIC.

You may also look into her being emancipated as a quicker route. At that point you will not even need to fill out a FAFSA for her. She will be able to do so on her own.

 

[Hannathy]

You may also look into her being emancipated as a quicker route. At that point you will not even need to fill out a FAFSA for her. She will be able to do so on her own.

As far as the Federal Government and the FAFSA it is extremely hard to do this before she is 24. Very hard unless she plans on getting married!

 

[wiigirl]

Go to Fafsa.edu.gov and check out the application and requirements. Establishing independence in the eyes of education is harder than in the "real" world.

Sent from my iPhone using DISBoards

 

[akaler2010]

For residency, you need to look at both the state's policy on establishing residence AND the Universities. For example, it is very easy to establish residency in North Dakota (30 days), but the Universities have stricter standards (12 months).

 

[lost*in*cyberspace]

This is a tricky issue. We lived in one state from the time my son was 7 years old until he graduated from high school at age 18. He was accepted at a state college in this state. Right before school started his freshman year at college, my husband was transferred out of state. My son was charged in state tuition until he applied for transfer to a different college in the same state at the end of his sophomore year. Then it was decided that my son was now a resident of the state where my husband and I were living! It took months of hassle with the school before they finally agreed that he could keep paying in state tuition.

You really need to discuss this with the Admissions office at your daughter's preferred college. Or better yet, try to get her to attend an in state school.

As for the FAFSA, my son was required to submit this when he applied to law school and had been self supporting for several years. He was over 24 as well.

 

[undertheradar]

I would suggest that you visit the College Confidential website. There are discussion boards on schools, paying for school, etc.

 

[allison443]

So, kinda complicated, and in the middle of tax season our tax preparer doesn't really have time to investigate this. Hoping one of you has some knowledge
DD is deciding on a college. We are a hard working family but cannot pay for school for her. She will rely on her own savings, loans, financial aid and scholarships.
Here's the question. Out of state tuition to her top choice school is MUCH higher than in state. (TRY 18K DIFFERENCE) My brother lives in state to that school. She could establish residency with him this summer, pay out of state her first year, live there in the summer and work, and be a resident for her 2nd year.
Can we still claim her on taxes? Does her fafsa still have us on it? She won't be living with us any longer but we will be sending her help as we can financially. I don't want to do anything illegal, and I want her to get the best financial aid benefit she can.
Anybody understand what I am talking about? haha thanks!

Two of my kids attended state schools in states other than ours. Your idea would not have worked at either of those schools. The information was on their websites as far as what constitutes residency for instate tuition purposes. Both exclude situations where the student moves to the state for the purpose of going to school. Check under the "tuition" or "bursar's office" sections of the website.
As far as FAFSA, in most cases the parents' info is required until age 24, even if the student doesn't come home for summers, etc.

 

[scrapquitler]

So, kinda complicated, and in the middle of tax season our tax preparer doesn't really have time to investigate this. Hoping one of you has some knowledge
DD is deciding on a college. We are a hard working family but cannot pay for school for her. She will rely on her own savings, loans, financial aid and scholarships.
Here's the question. Out of state tuition to her top choice school is MUCH higher than in state. (TRY 18K DIFFERENCE) My brother lives in state to that school. She could establish residency with him this summer, pay out of state her first year, live there in the summer and work, and be a resident for her 2nd year.
Can we still claim her on taxes? Does her fafsa still have us on it? She won't be living with us any longer but we will be sending her help as we can financially. I don't want to do anything illegal, and I want her to get the best financial aid benefit she can.
Anybody understand what I am talking about? haha thanks!

Here's something else to think about. What is she going to major in, and what states are you talking about? Here in New England, there is an agreement among the states regarding lower tuition for out of state students who are majoring in certain areas of study. The website describing the program is www.nebhe.org and they say " NEBHE's Tuition Break program, the New England Regional Student Program (RSP), enables thousands of New England residents to enroll at out-of-state New England public colleges and universities at a discount. Students are eligible for the RSP Tuition Break when they enroll in an approved major that is not offered by the public colleges and universities in their home-state." So for example if you are from CT and want to study Hospitality Management, you can go to the University of New Hampshire at a discount (not as low as in-state tuition, but a lot lower than out of state tuition).

So something like that might be worth considering.

 

[TLuvsD]

Each state determines residency requirements. They vary, and they have become MUCH harder in recent years. Being emancipated for legal issues is different than being emancipated for FASFA--which is very difficult. And states have their own financial aid rules. You need to gather a lot of information, I'd start with the college websites and the state websites. You want first hand information, preferably that you can print out.

The schools FA officers can answer many of these questions, but I would do some initial research on my own.

 

[yellowjacketfan]

Our experience has been the student can become a resident after the first year- I'm sure this will vary. Another thing to be considered, most of my dd's loans are parent plus. They will assume parents pay a chunk whether they can/will or not. Good luck!

 

[cvjw]

We are thinking about doing something similar for our younger DS in a few years. The college we are thinking about for him has all of the residency rules on the website and a person at the college that handles only residency issues that you can call and talk with.

I will say this that your plan would not work for the college we are looking at. Years ago, it would work, but things have changed. Colleges make lots of money on out of state students, and it is beneficial for colleges to keep them as out of state students.

 

[jeffbear]

You really need to talk to the financial aide people at the school in question. State system schools typically have vastly different rules than private colleges and there are sometimes different rules for part time students and grad students. It's complicated no matter how you slice it.

One thing you can count on ... the admissions office financial aide specialists have been through all this stuff a hundred times before. They'll be able to give you ALL your options.

 

[NotUrsula]

Doing it that way would be very difficult; as PP have said, getting out of the "family contribution" rule is very difficult these days.

However, claiming her as a tax dependent cannot help, no matter what the situation is. If she is living with a different branch of the family, then presumably that household is supporting her, not yours.

While NOT claiming her as a dependent probably won't make a legal difference in terms of her actual residency status, claiming her as a dependent is pretty much guaranteed to shoot down any appeal that she might make re: add'l financial aid on the grounds of what is known as "parental refusal." If she is granted a parental refusal exception her own income will be what is taken into account for loan qualification, but it doesn't qualify the applicant for Federal grant money -- no Pell grants.

(I understand that you are claiming that you cannot afford to give her financial support, not that you simply don't want to, but in legal terms it is the same thing: if she will look for adjusted aid eligibility because you don't support her, it really doesn't matter why not.)