I just wanted to get the public’s opinion on whether my case was worth appealing. I’m an international student, and I’ve been accepted to a need-blind Ivy League school. However, I received no FA.
My family’s financial situation is that they own assets worth $2 million, and earn a combined income of $100K. Last financial year, they earned $180K.
Now looking just at these figures, it’s quite clear (and fair!) as to why I haven’t received any FA. However, if my parents were to liquidize their assets, they would make a very small profit, if any. So, even if my parents could sell off their rental properties, all the revenue would be used to pay back the banks.
Would a case like this be worth presenting? Any tips? Of course, I’m very lucky to have parents who are financially stable, but there’s no way I can ask them to pay $65K a year on a salary of $100K.
Why is there income only $100K when they earned $180K last year?
So they have ZERO equity on the properties? It is unusual for a bank to loan the full value of a piece of property.
No other investments, assets, or bank balances?
How does the cost of living in your home country compare to the USA?
Dad had a well-paying job last year, however, he changed jobs just after the last financial year ended. The 180K income helped him get the loan. Also, they own 2-3 properties (acquired over the space of a few years, not at once), but the overall equity would be close to 0. No other investments/assets that I know of.
The cost of living is probably a little higher here in Australia.
Doubtful they would consider you having need, with those assets. They would likely expect your parents to take a loan on the property (mortgage/refi and pull out equity).
Your problem isn’t as much with the rental properties, since FAFSA does ask for debt owed against the asset, as it is with the $180k income. FAFSA counts roughly 50% of every dollar your parents make after the first 30-35k as being available for college. On a $180k parental income, you probably have an EFC of around 60-65k.
So your parents’ income from work and rental income combined was $100k last year.
On the FA form did it ask about value of rental properties and what is owed on them?
Even if there is no equity the fact remains that this is not the primary home and that your parents could sell the rental properties if they needed to.
The ivy will have their own FA forms and calculations, FAFSA doesn’t come into play in this case.
Yes, but as teresajs correctly points out, if there’s no equity, selling the properties nets $0.
Again, yes, but just like FAFSA, these other FA forms ask about debt against the asset. If OP’s parents owe just as much on the properties as they can currently be sold for, they are not counted as assets for FA purposes. The driver here in OP not receiving any FA is the high income from last year, not the assets “worth $2 million” which if sold the proceeds would just be handed to the bank(s) holding the mortgages.
I think you definitely want to talk to the school for a couple reasons. First, I think BelknapPoint is correct and they’re likely only including net assets (after debt) for assets that are encumbered, but you can make sure. Second, if the family income will be $100,000 in subsequent years, you may want to ask how that will impact your aid in future years. Your aid may increase for sophomore-senior years since the family income will have been cut nearly in half and that might factor into your decision.
Agree this makes no sense. Unless the parents have mortgaged their rental properties and their personal residence to the hilt, there must be some equity somewhere. And what about other savings or assets? And this is an international student. Many schools want to see proof that the student can afford to attend, and this includes airfare to/from Australia, which ain’t cheap.
Agreed, something’s odd. If you owe 2 million on 2 million of assets, it’s pretty much the same as not having those assets. We did a bunch of CSS/PROFILEs, and they all asked for debt against assets, whether it’s for investment or outstanding mortgage.
I’d definitely contact the FA office.
Also, for what it’s worth, I wouldn’t assume your cost of living is higher in Australia than it is in the US. Maybe in certain areas of the US, but Ivies are in NYC, Boston, Philadelphia, NJ, CT… Absolutely high cost of living areas. Now if you were coming from Hong Kong or Switzerland…
Sorry, I forgot to add that the rentals generate about $70,000 a year. I’ll be visiting the school in the upcoming weeks, so I think my parents and I will visit the FA office and see how the meeting goes. I’ll try to update this thread after the meeting for future reference. Apologies once again!
@BelknapPoint i hope the OP clarifies their family income. Something isn’t right here.
The issue this poster is having, I’m guessing, is the family income. With $170,000 in income, there wouldn’t be a lot of need based aid at most schools.
If the family had things like depreciation and other expenses related to those rental properties, that also could be a problem in terms of financial aid. Those all might not be counted and could be added back in as income.
Also…what about their primary residence? Any equity there? For Profile Schools…this would matter in some cases.
Where did this family get financing for $2,000,000 in real estate with NO down payment. What are the monthly payments on this?
