<p>I've got two kids in different colleges, and both schools have been generous with us. I quit my job three years ago because of a disability and receive a $40,000 Federal Government disability pension. I also receive another $40,000 pension from a previous job. I cannot work and my wife is a full time homemaker. We have three other younger girls. </p>
<p>Today, the college raised the assets on my FAFSA to $465,000. I own a rental property appraised and assessed by the town at less than $200,000, which is the amount I had entered as assets. We have about $13,000 in savings. </p>
<p>This raised my EFC from 4640 to 11400. </p>
<p>My daughter is beginning her third year in this college and any cut in her aid will mean her leaving school. </p>
<p>Also, how will this affect my son's college aid situation at a different school? </p>
<p>Can anyone experienced in this sort of thing provide any insight or suggestions? I truly appreciate the help.</p>
<p>Was your daughter’s FAFSA verified recently? If so, what did you submit for documents? Your daughter should go in to the FA office on Monday…it’s possible that it’s simply an error.</p>
<p>Yes, over the past several months, I have been supplying documentation to them, some 250 pages in all. Tried several times to meet with them in person but they were not available. Fifteen times, to be exact. </p>
<p>I did fill out a form that listed my assets and the numbers I entered were directly from the tax assessor. They didn’t request documentation. </p>
<p>Could they simply disregard my numbers and make up their own like this? </p>
<p>I’m planning to go down there when they open next week, be the nice guy but cry a lot.</p>
<p>I wish you luck but can see a couple of problems…first, town tax assessments are not real appraisals and rarely reflect market value. If you want to argue market value, you should probably have an independent appraisal done or at least have a realtor put together a list of comparables for you. Also, an $11K EFC (or roughly $22K split betwen two kids) seems very low for a family with $80K in income and $478K in assets. Are both of your pensions reportable for FAFSA?</p>
<p>I suppose I can document a low market value and they can take it or leave it. As long as they can conger up numbers, why argue with them? </p>
<p>It appears that the reporting requirements of income are pretty tight. The Federal Disability pension is reported to me on a 1099 and the other is a State pension reported partly on a 1099 and partly on a W-2. </p>
<p>The part of the Disability that equals Social Security is not taxable but is added back into the FAFSA. </p>
<p>So perhaps I shouldn’t complain? I do have five kids, pay property taxes here on Long Island of $20K and have the other kid in college also. </p>
<p>Will this FAFSA change affect the aid that the other school already awarded my son this year? </p>
<p>What one school does will not affect any other schools. The other school won’t even be aware of the changes made to another child’s FAFSA.</p>
<p>I think that your EFC is high, particularly if the value of your rental property isn’t close to $465,000. I would absolutely ask a realtor for comps & see if you can get the assets lowered to a more realistic level, if you believe that this amount is so much higher than you could realistically get for your property. Some schools are really sticklers on the assets - but if you provide proof for them, they may back down on the numbers they used (which they probably determine from some formula).</p>
<p>I have no problem bringing my daughter to a different school, if this one continues along this route. She just began her third year here but there are many other choices. </p>
<p>I have to see how this FAFSA change will effect the generous aid they always gave her. That is the bottom line and they have been very generous in the past. </p>
<p>It’s odd that her FAFSA was verified each year by this same school and they always accepted my same asset figures for the past two years. Do they think the real estate more than doubled in value this year?</p>
<p>It’s more likely that you have a different financial aid officer reviewing the file this year! If you don’t get any satisfaction, please ask to speak with a supervisor & explain your situation; request a review. I am sure the school does not want to lose your daughter over this.</p>
<p>Now if the real estate investment disappears next year are they going to want to know where the money went? Or am I suppose to save that to pay for college also?</p>
<p>Your EFC seems pretty much in line if not low for an income of $80,000, one incomd earner and rental property. It never hurts to ask for a review a sthe situation will either change or it won’t change. You’re quite fortunate financially, really, in the grand scheme of things. No one can “predict” what would happen if the rental property disappears, however, if fraud is involved you run the risk of the consequences of course.</p>
<p>You have to declare the gain on the sale of rental property when you file your taxes. So…the college should easily see that the property was sold. However, if you spend the $200,000 in profit then you won’t have it as an asset.</p>
<p>Does this rental property net you any income? Did you take any losses on this property for tax purposes? This may be where the additional “value” is coming from</p>
<p>Yes, the property takes a loss every year, so it reduces my tax liability. But since I can no longer work and my income is greatly reduced, the savings on taxes is much less than it was when I worked. </p>
<p>If this is going to cost me several thousand in financial aid every year, I would consider selling the place and spending the money. </p>
<p>I have two others I must put through college. If owning an asset is going to make the difference between their going to school or not, the asset will be gone. </p>
<p>Is that thinking wrong? Or am I missing something? </p>
<p>Of course I’ll have to assess exactly what this place is costing me in aid vs. what it earns and saves in taxes. But it looks like it’s time for it to go.</p>
<p>Yes, that thinking is dead wrong. If you are considering selling the asset, it would be stupid to spend the money on something unnecessary – you have absolutely no guarantee that the schools your younger children attend will meet need. So the logical thing to do – given the fact that you are losing money from the rental – is to sell it and put the proceeds into a 529 account for your children. That will be considered an asset for financial aid purposes, but not any different than the value of the current investment and the money will be available to fill any gaps.</p>
<p>In other words, lets say you net $200K and put it in a 529. Your EFC goes up by roughly $10K annually because of that asset – but you can turn around and withdraw that $10K each year to fund the kids’ college, as needed. And you can at least have that $200K fund invested in some fund where it is earning a little bit of interest.</p>
<h1>5: —The part of the Disability that equals Social Security is not taxable but is added back into the FAFSA.—</h1>
<p>That statement does not sound right. I think only the taxable part of the Social Security income has to be reported on the FAFSA. The untaxable social security benefits, on the other hand, the FAFSA instructions specifically say NOT to include in the FAFSA. So your statement sounds exactly backwards as to how that social security income should be treated on the FAFSA. Perhaps you did your taxes wrong and more of your income should have been reported as taxable social security and the financial aid office made a change based on that. With an income totaling 80K per year, I would think that 85% of your social security income, whatever that figure is, is taxable and therefore reportable on the FAFSA. If the “Federal Government disability pension” you referred to in post #1 is ssdi, then that should be about $34,000 of reportable agi right there in addition to 40k from your private pension.</p>
<p>I fully agree with Calmom. I want to add…don’t be penny wise and pound foolish. Perhaps choosing less expensive colleges is a better choice than selling a property that has value and is giving you a small income. Your kids won’t be in college forever and when they are done, you might regret selling that property.</p>
<p>And remember, not every school meets full need anyway…and the generousity of the schools varies wildly.</p>