My step-father is currently in the last stages of a workers compensation lawsuit with his former employer and they are finalizing the offers. At this point, he is to receive about 80k via monthly installments for the next 7 years. He has already been receiving about the same monthly amount for the last 2 years (they will subtract what he has already been given from the amount he is to receive) so our EFC will not change because of that.
However, there is a lump-sum medical insurance payout that will happen later this year/early next year after they finalize it. This will be substantial with both lawyers from each side talking about 250-275K depending on what Medi-Cal comes backs after calculating it into their formulas. Obviously, my EFC will go sky high after this lump-sum is included in our FAFSA/CSS Profile.
I'm attending American University in the fall. At this current point, my net price is affordable (about 20K a year). I fear that the lump-sum will make us have to pay full price during the year that it applies - because of prior-prior year, I'm probably looking at my junior year. 61K will be far too much for my parents to pay.
What options do I have? My parents are talking about divorcing prior to receiving the settlement because my step-fathers finances would not have to be reported if they were divorced. Is that a sound idea or is that illegal? Another option that I'm thinking about is taking a year off during the year that this would be on my FAFSA, am I allowed to do that? Any help or ideas is appreciated - thanks!
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