Fasfa tips

quote:

Originally posted by VaRHPmom:
I just filled out the CSS Profile over the past couple of days. It asks for much more than the FASFA including cost of your home when you bought it, current market value, and how much you still owe on your mortgage.

Trouble is, I can give the current market value; however, I don't think anyone is currently buying around here from the homes that have been on the market for over six months down the block.

I also did the "Net Price Calculator" on College Board. After it gave me the reply that I can afford to pay the entire price of one of my son's top choices, I had to break the news to my son that this may not be a possibility. I'm calling Financial Aid next week to see if I get a different answer.

Anyone else filled out the CSS Profile?

the more you have the more of it they think they deserve,,i would super low ball any estimate on home valuations

quote:

Originally posted by Goosegg:
Wog - while you don't want to sell the stock in your child's name, the college implicitly uses roughly 20% of the child's assets each year as part of the EFC. So, either you sell it or you cover that amount.

On the other hand, colleges expect a parent to use far less % of their assets each year. If only there was a way for the child's assets to return to mom and dad - as a whole the family unit is better off.

Wog, like Goosegg mentioned you could cover the amount from your other funds or paycheck, equal to what should be contributed from your child's account. I am far from a tax accountant, but if you give to a church or charity, you could "donate" part of your child's stocks to that charity each year, and then take that now available cash and use toward college costs. You would avoid capital gains taxes on the donated stock. We have successfully done this several times. It is a nice, charitable, way to avoid taxes on any gains. If the stocks are in the form of a mutual fund, check with your charity first, which you will have to do anyway to complete some paperwork for the transfer.

Not sure if the stock, if solely in your child's name, would complicate this?

We were told that in computing value of real estate, estimate the value based upon a 30 day listing (i.e., what price would you get for your property if you had to sell it within 30 days). Also, deduct from that amount all closing costs (comission, taxes, etc.).

That was really helpful info everyone posted. Here is my question if anyone knows....my husband is disabled and receives social security. Does this in any way have an effect on the FASFA??? Son already has a verbal commitment to a D 1 school, but I need to figure out how to finance the rest.

quote:

Originally posted by Goosegg:
We were told that in computing value of real estate, estimate the value based upon a 30 day listing (i.e., what price would you get for your property if you had to sell it within 30 days). Also, deduct from that amount all closing costs (comission, taxes, etc.).

A 30 Day listing would probably cut my house's value in half. Not a lot moving in this market.

SportTmom22,

This link may provide some information:

Effect of Social Security-Disability on FAFSA

http://talk.collegeconfidentia...isability-fafsa.html

/QUOTE]
tough system to beat,,sounds like a safety deposit box, cash, silver coins are the only way around it..again just do the right thing and you'll pay for the people that do the wrong things.[/QUOTE]

Believe it or not, you did indeed hit the nail on the head!

Looks like my son's current #1 choice just got taken off the list. Apparently, we are supposed to afford more than my annual take home pay to pay for his college education each year! Somehow, I just don't see a very great return on that investment when other schools with merit scholarships can get him to the same place.

He's disappointed but then I suspect that his current #2 was going to end up as his #1 since he always liked it best. He just got hung up on academic reputations (and they really aren't that far apart on that level).

I did start wondering who does attend these extremely expensive ($50,000+) schools because I don't see anyone who has managed their money well going into debt when a comparable education could be obtained at a lower price. I'm beginning to think that if a study was done, there would be an inverse bell curve representing the household incomes of the students in the college. Anyone know if there has been such a study on the effect of the elimination of merit scholarships in favor of financial need only on the relative family "wealth" of the student populations at these schools?

Schools which have no (or limited) merit aid and rely soley on fafsa experience the "bow-tie" effect. Students of middle class parents are squeezed out; children of wealthy parents can afford the price and children of poorer parents get decent FA. I think an example is Wash U of St. Louis (which as of last year did not do need-blind admission decisions) and runs over 55k per year. At the other end of the spectrum are the Ivy league schools - especially Harvard, Yale, and Princeton whose FA is in the form of grants and make the price of a HYP education, for middle class families, in line with a state school. A better deal cannot be had.

As a parent who has two older sons who are and have went to college my experience is that the poorer you seem on paper (your taxable income) the better your results for scholarships.

My older son received the maximum scholarship from a private university as well as grants that totaled about $35,000/ yr for a $40,000 / yr school. He took $5000.00 / yr in student loans to cover the rest. Although he is now in the military that will pay off all his loans. Plus he should be able to get his RN license by the time his enlistment is up.

My next older son who is in his second year at a D1 university received a fellows scholarship that paid everything (tuition, room and board, books, supplies) plus gave him money for a laptop.

My advice would be not to save one dime for your child for college. This is easy for me because I have a wife who stays home (even though she is a degreed electrical engineer) and homeschools my younger kids.

Make sure your son studies for the ACT the summer after his sophomore year and try to score a 27 or better. Also have your son take as many dual credit courses (classes that will count toward college) as these are cheaper while in high school. Both my sons ended up with about 24 hrs of dual credit courses before starting college.

There are some D2 schools in our area that will give a full ride to any student scoring a 27 or better on their ACT.

Also the military can be an option. It will pay for your tuition (GI Bill or Montgomery Bill).

I have a 13 yr old son who has demonstrated a knack for baseball and football. I will plan for him to get a full ride on academic but won't look away from a potential athletic scholarship. :O)

BTW, I don't think the education of the parents affect scholarships because both my wife and I are degreed engineers.

Great advice trad!

In this weekend's Wall Street Journal, page B7, there is a really good article: "The College-Aid Shuffle" which really gives great insight into the FA game and how to play the game by the rules.

I recommend that all parents read and absorb those insights.

Sorry I don't have the web address for the article, I read the old fashioned way.

Thanks for the heads up Goosegg. Here is the link.

WSJ- College Aid Shuffle

Another comment I have is that college is not for everyone.

If any of my sons couldn't score at least a 25 on the ACT, didn't have good study habits and keep an A/B average in high school I would have steered them to a trade school or the military.

Also I forgot that the FAFSA gives you the result in the form of EFC Expected Family Contribution).

You want that number to be as low as possible of course.

I have been doing some homework on FA since my Son wants to play for a D3 private school. I own my own business and thought I would have to include that value= NO not unless I have over 100 employees. Also, if you live on a farm you don't include that either. Below is quoted from here what you do include:
http://www.getreadyforcollege....b4f361d124427003dc7c
Family-owned business with more than 100 employees
A farm that the family does not live on

I met with the school FA person. I used an example. Let's say I live in a 10M home paid for and my business was owned by an ESOP retirment plan. I sold my business for 20M in 2010. I took enough income in 2010 to live for 4 years so I don't have any income in 2011. I am worth 30M and my kid would get free college! She said "that is just their criteria to not count retirement or home....

After the FA process the coach said he would get admissions to "sharpen their pencil" The $42K is down to 30K so far with academics and I am hoping they do some sharpening!!

BTW, I don't qualify for any money as my income is too high. Hopefully I will qualify for some loans!!

Well this may depress you but College Conspiracy

quote:

Originally posted by Brawnko:
I met with the school FA person. I used an example. Let's say I live in a 10M home paid for and my business was owned by an ESOP retirment plan. I sold my business for 20M in 2010. I took enough income in 2010 to live for 4 years so I don't have any income in 2011. I am worth 30M and my kid would get free college! She said "that is just their criteria to not count retirement or home....

I have pondered this for several days....mostly wondering what it would be like living in a paid-for 10M house! But for those that may read throught this thread in the future:

1) Assuming you kept the proceeds from the sale of your business farm in a retirement vehicle, drawing out living expenses for 4 years would be a taxable event from a non-Roth retirement plan, plus penalty if you are not of retirement age. You would would need to add about ~15-20% ? more to cover the tax.

2) The 4 years of living expenses would need to be put in a non-risk account, which today would draw about 1% interest. I can only guess what yearly living expenses would be for a family living in a 10M house, but the real estate tax would be ~$95,000 yearly in my county. Add in a new (luxury) car or two in those 4 years, upkeep to the estate, and travel expenses to see your son play in college plus other living and college tuition expenses.....let's just assume you would need $250,000/yr or $1,000,000 for those 4 years. In the safe, 1%, account that would generate about $10,000 in interest (dominished yearly), which is part of the AGI for the FAFSA. Plus, the $1M sitting in the interest bearing account for household expenses, now is a parent asset of which <6% is considered available for college ($60,000 the first year).

3) Some/most private schools require the CSS profile which could include the equity in your home ($10M).

In your example, it really doesn't look like your son could go to college for free. The financial aid representative gave you the correct answer, but there is WAAYY more to it.

Here is a link I found of ways to maximize financial aid legally:

http://www.finaid.org/fafsa/maximize.phtml

I have an interesting bit to share. I saved for my oldest child's college and wrote the checks each semester without any loans. MISTAKE !! When she got her first job, they asked how much her student loan payments were because they wanted to help with a monthly stipend. That news really hurt, so if you have it, don't spend it, continue to save it until all the cards are played.

quote:

I have an interesting bit to share. I saved for my oldest child's college and wrote the checks each semester without any loans. MISTAKE !! When she got her first job, they asked how much her student loan payments were because they wanted to help with a monthly stipend. That news really hurt, so if you have it, don't spend it, continue to save it until all the cards are played.

Is that something that is typical at the company where she works or the industry? I might want to steer son in the 'right' direction...