<p>My husband and I have a small company that has done very poorly the last few years. We honestly struggle to pay our bills. We are too old to go out job hunting. Both our company and personal taxes look terrible. When the company was doing better, we bought an investment condo to hold onto and use for retirement. We have tried to sell it, but no takers. We could probably "give it away" now, but we are both approaching retirement age very soon and would like to hold on to the condo until we can get something for it.</p>
<p>My son is a senior at a pretigious school and is applying to graduate school this year. When he started, we had all intentions of paying his tuition every month. We didn't anticipate the economy or the major drop in our income. I have deferred two of his loans. We are already in debt over $120,000 "just for his college loans". My daughter will start college next year.</p>
<p>Is there ANY WAY to get financial aid without selling the condo at a loss?</p>
<p>When you say, “sell the condo at a loss” do you mean for less money than you purchased it for? or do you mean less than the value of the liens on the property? If the condo is a second home and has equity, then most colleges will consider it as an asset that can be used to fund a child’s education. If the condo has liens that exceed it’s value, then the asset obviously has no value to you when it comes to funding your child’s education.</p>
<p>If the condo has equity but you don’t want to sell, you may want to consider taking a mortgage against it. The interest you pay on that mortgage may be tax deductible.</p>
<p>You don’t give enough info to help. Is the equity in the condo, added to your other assets, such that calculators show an EFC above the costs of the colleges your daughter is looking at?</p>
<p>If yes, merit aid will be your best bet and the thread on top of this board will be helpful.</p>
<p>Colleges will not ignore your condo, but depending on it’s value and your equity in it, you may still qualify for aid given low income. Especially at the generous aid schools if your daughter is competitive for them.</p>
<p>I wasn’t clear. We do have a mortgage on the condo. I’m guessing that I could sell it and pay off the mortgage, but there wouldn’t be much extra. Not near enough to pay my son’s student loans. The condo was worth a lot of money at one time. If I would have known, I would have sold it. My plan was to keep it for retirement in a few years. I checked about refinancing the condo or our home. They say that our debt ratio is too high and we don’t qualify for refinancing. I used personal assets, a second mortgage, credit cards, etc., to keep our company afloat. We didn’t let any employees go which was probably dumb. Hopefully, the economy is on the upturn. We have had our business 30 years and this is by far the worse it has ever performed. I don’t understand how my company and personal losses don’t show up on the FAFSA.</p>
<p>You need to run the figures with both FAFSA and CSS Profile calculators and find out what your EFC will be for your daughter. Then you need to get honest with her, and with your son, about the expense of their educations. Your son may want to get a job now to start helping pay down the debt for his education rather than incurring new grad school debt. If he is headed into a fully-funded grad program, he may have enough left over each month to chip away at that debt and/or help pay his sister’s education. When I was in grad school, one friend who was a fully-funded grad student sent half of his pay each month to his brother who had no funding at a different university.</p>
<p>Yes, it sure looks like you can’t afford to send your daughter to the kind of school that her brother went to. But, that is just the hard cold truth. That was then, this is now. Your daughter needs to be hunting down schools that your family can afford. This doesn’t mean she will have a bad education. She may actually end up one that fits her needs better!</p>
<p>As for the condo. If it still has some equity in it, could you sell it and then tie up the money in a retirement annuity? I’m not certain what that would do for this year’s FAFSA/PROFILE, but for future years the money in the retirement annuity would be invisible to FAFSA.</p>
<p>If your condo’s equity isn’t nearly enough to pay your son’s loans of $120,000, then that equity won’t add very much to your EFC. If you could net $50,000 by selling it, for example, then its marginal contribution to your EFC is $2800/year. You have an asset protection allowance of $50,000-$70,000, depending on the age of the older parent, so it’s likely the condo will fall under that, and therefore won’t even be a factor for FAFSA.</p>
<p>Agree with the other posters who recommend that you run the calculators. If you have little net income in 2009, and if your major asset is your condo, then your EFC is likely very low. If your business is more than 50% owned by your family then its net value is not reported on FAFSA either. FAFSA doesn’t consider debt in its equation.</p>
<p>If you were to sell the condo, you would pay off the loan and not clear anything? Then you should be entering that as $0 value on financial aid forms; therefore, if you are entering it correcting, you should not be penalised by the condo ownership.</p>
<p>I think you are probably a family that needs to stick to FAFSA only schools (largely state schools). With low income and little equity in the condo, your EFC, as vballmom said, should be low. But the downside is most don’t meet need.</p>
<p>It’s Profile schools where you could be in more trouble. They can value a business, even a poorly performing one, to price the school out of your range.</p>
<p>OK…I’m confused. Are you (OP) saying that the value of this second home is enough that your son does not receive need based aid? The “value” reported on the financial aid forms should be the equity you have IN the home…not the resale cost. In other words, if the place is worth $100,000 and you owe $50,000, then your equity is $50,000. This $50,000 would be an asset of yours. Presumably if you sold the place for $100,000, you would net $50,000. If the value of the place is only $50,000 and you owe $50,000, the equity in it would be NOTHING…and that would not have any impact on your financial aid award whatsoever.</p>
<p>So…the info missing…what is the EQUITY you have in this property? How much could you sell it for? What would you DO with that money because if you net a profit, the cash would also be an asset that would be used when dealing with the financial aid formula.</p>
<p>NOW…if this second property has some significant equity, most schools will say it’s a choice for you to purchase and own a second property. </p>
<p>But again…if this second property has no net worth, I’m curious how this has affected your kid’s financial aid.</p>
<p>I’m also assuming you are talking about your daughter’s financial aid.</p>
<p>I know this isn’t the advice you came here asking for…but please please help your daughter identify colleges that are financially reachable for you. I know you have already assumed a lot of debt for your son…and may feel you should be offering your daughter the same…but it sounds like economically, times have changed for you. Identify some schools where she might be eligible for some merit aid. Identify some schools where the costs are such that you won’t have to take out loans in excess of the Stafford loans. </p>
<p>The economy has hit a lot of families in the same way.</p>