Complicated Family Situation

Paying for College
1

<p>I'm wondering how colleges deal with complicated family situations in assessing financial aid. </p>

<p>Case in point, X and I have three children, D1, D2 and D3. D1 is a HS jr. and we are starting the whole college dance. I am divorced from X and remarried to W, who is the mother of Step-D, also a HS jr. W has full custody of Step-D and I support Step-D because her father is a deadbeat dad. X is remarried to H2 and they have a new baby, S. D1, D2, and D3 live with me full time since X moved away to another city, although our official custody order is 50/50. I make a good living as a self-employed prof'l. W works part-time, but I make 20x her income. But we have no assets due to my very expensive and ugly divorce from X and because we live in one of the most expensive places in the country. X and H2 are both unemployed and have no assets. How they survive is a mystery, but I suspect H2's wealthy mother is supporting them.</p>

<p>Got all that? (Wouldn't blame you if you didn't.) When I run the net calculators, my EFC is pretty high due to my income. But I'm not plugging in X's income and assets, which are zero. When it comes to FAFSA and the real deal, will the schools factor in her 0 income and assets? Will they look at H2's 0 income and assets? Will they look at W's income? Will they factor in that I am responsible for paying for Step-D's education because her dad is out of the picture? Will it matter that the D's live with me full time, even though our official custody order is 50/50? </p>

<p>Finally, I'm wondering if there are professional financial aid consultants who help people with complex situations fill out the FAFSA etc. Anybody have any experience with that?</p>

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<p>There are several posters out here who can help you with the nuances of this. A few points:</p>

<ul>
<li>Pretty much every college will look at yours and your current W’s income and assets for certain.</li>
<li>For FAFSA purposes, I believe your D will be considered to be living with you because she is spending more than half the year under your roof (does not matter what your agreement says). So your (and your current W’s) income and assets are what count on the FAFSA. FAFSA does not look at the other parent/their spouse, just the one the kid lives with.</li>
<li>Many schools also request the CSS Profile as well. Those schools will also look at your ex-W and her current H’s income and assets. Some school’s don’t request the Profile, but have their own form to fill out (Swarthmore and maybe Grinnell are a couple that come to mind, I am sure there are many more). Note that your ex-W and her H are supposed to report income from the H’s mom on those forms if she is supporting them.</li>
</ul>

<p>Someone else will have to answer about your step-D and that impact. It probably does make a difference whether she is college age or not (don’t think you said).</p>

<p>Also, you say you are a “self employed professional”. If you have a corporation (even an S-corp), that adds paperwork and complexity to the picture as well. Some colleges seem to think the assets of the corporation are fair game (somehow) for paying for college.</p>

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<p>intparent-</p>

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<p>I believe if both Step-D and D1 are in the same household, your EFC will be split 50/50 by FAFSA. Schools may or may not reduce that number for D1 because there are two in college-- it’s possible that the lessening by Step-D’s college presence will be offset by the presence of X, especially if X’s mother is supporting them and they are reporting that.</p>

<p>Your D will also need income information from your ex (tax-returns and things) as well for many schools.</p>

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<p>Since your D is living with you more than 50% of the time, you will file FAFSA and report your income and your wife’s as the custodial parents. It doesn’t matter what your divorce decree says, it’s physical location of the student that matters on FAFSA. Your X and her husband’s income and assets are not reported on FAFSA since they would be considered non-custodial parents.</p>

<p>Approximately 350 colleges use an additional form for financial aid called the PROFILE. About a third of those colleges require information from the non-custodial parent, so if your D is interested in one of those colleges, or a college that has its own non-custodial form, you will need to have your X fill it out with her income/assets and those of her husband’s. Here’s the list:</p>

<p><a href=“CSS Profile – CSS Profile | College Board”>CSS Profile – CSS Profile | College Board;

<p>The number of children in college and the total number of people in the household are reported on FAFSA. If your step-D will be in college at the same time as your D, you will fill out a FAFSA for both girls. If neither girl has any income or assets then their calculated EFC for FAFSA will be half of the total EFC that you would have if you only had 1 child in college. Your calculated family contribution for Profile schools will vary based on how their internal formulas deal with more than one child in college at a time.</p>

<p>Small business owners do not report the value of the business on FAFSA if there are fewer than 100 employees. Presumably your income from your business would already be on your 1040 as W-2 wages and business earnings. The PROFILE form requires additional business information and often colleges will add back in certain business deductions.</p>

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<p>Absolutely! But the best case scenario using such a “consultant” is that they’d bleed you so dry that your kids would end up qualifying for full financial aid. :smiley: So, if that’s what you’re looking for, then go for it.</p>

<p>Anyone can fill in FAFSA - it doesn’t require an education or even any financial savvy. You can do it yourself.</p>

<p>The CSS Profile (required for all of [these[/url</a>] schools) is much more of a pain, but still not unmanageable. And if you have any questions, come here and ask. There are plenty of experts on this forum - experienced parents, college financial aid professionals, and tax experts. And it won’t cost you anything. ;)</p>

<p>Sounds like your kids should be looking at schools that offer significant merit aid that’s completely independent of ability to pay. There are plenty of options, but you might want to start here:</p>

<p><a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/1348012-automatic-full-tuition-full-ride-scholarships-7.html#post15895768[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/1348012-automatic-full-tuition-full-ride-scholarships-7.html#post15895768](<a href=“CSS Profile Home – CSS Profile | College Board”>https://profileonline.collegeboard.org/prf/PXRemotePartInstitutionServlet/PXRemotePartInstitutionServlet.srv)</a>
<a href=“Competitive Full Tuition / Full Ride Scholarships - Financial Aid and Scholarships - College Confidential Forums”>Competitive Full Tuition / Full Ride Scholarships - Financial Aid and Scholarships - College Confidential Forums;

<p>But there are many, many more out there. Spend your time identifying those schools where your kids will qualify for significant merit aid, and you won’t need to worry about need-based aid.</p>

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<p>Thanks for the info. Here are additional facts if it matters:</p>

<p>D1 and Step-D are both HS jr’s. D1 is by far the better student with a 2080 SAT (1st try, no prep, will take again with prep), 3.9 GPA (uw) 4.3 w, ranks 3/325, multiple AP’s, awards, and good EC’s, and has aspirations for a top-tier school then grad school. Step-D is a sub 3.0 GPA student who plans to attend a 2-year CC and hopefully transfer to a 4-yr state school if she can get decent grades and figure out what she wants to do.</p>

<p>Neither D1 nor Step-D has any assets (well, maybe @$500 in the bank). Step-D works part-time, but <$1,500 in the past year). D1 does not work (focused on school!)</p>

<p>My business is a small LLP, prof’l practice, pass-through entity with 3 partners and two employees, and no real assets (desks, PCs).</p>

<p>I thought if my situation was so complicated, maybe a prof’l consultant could figure out the best way to present the info, but it sounds like I can do it myself with some research. Thanks.</p>

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<p>vballmom -
Thanks for the link to the list. It looks like quite a few of the schools on D1’s list require the non-custodial profile. Also something called the IDOC. If the non-custodial is required, does that help reduce my EFC? In other words, does the fact that X and H2 are unemployed decrease my EFC because they expect them to contribute but they can’t? Or would they only use it to increase my EFC if they in fact did have income and assets because they should be helping pay for D1? Just wondering how the non-custodial profile is used, if anyone knows…</p>

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<p>No, the fact that X doesn’t have an income will NOT reduce your “family expectation”. Yours will be based on your income. A school isn’t going to give your child more money because her bio mom has no income. That would be crazy. </p>

<p>However, the schools may become suspicious and wonder how X and H2 are supporting themselves and that may be an issue for getting aid at the schools that require NCP info.</p>

<p>Also, if step-D is attending a CC, then altho FAFSA may split the EFC, CSS Profile schools will ask where step-D is going to school and how much that costs. Since that won’t be much, CSS schools may not split their family contribution 60/60 as they normally do. (CSS schools do a 60/60 split, not a 50/50…and the split is how they define it.)</p>

<p>I know that this isn’t part of the conversation, but you mention that your D doesn’t work because she’s “concentrated on school.” She could work during the summer. And, frankly, if she gets aid in college, likely she’s going to get Work study and have to work. Working a small amount during the school year doesn’t negatively affect grades. Since money is so tight in your household, you might consider having your Ds work a small amount…just to cover their pocket money and such. A few hours a week on a weekend isn’t going to hurt grades.</p>

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<p>DgDzdad, financial aid is complicated for those students who have a number of options for several reasons:</p>

<p>1) Schools are permitted to determine need and fulfilling it any way they please when it comes to their own money</p>

<p>2) FAFSA, which is the application for federal aid, and is required by most every school, at least as a first step, only guarantees your student PELL grant (which I doubt your kids will qualify for because it is for the poorest for students), Student Stafford loans $5500 freshman year, and eligibility to get, but no guarantee of getting Parent loans (PLUS) for the parents (credit is checked for outstanding bills), work study, SEOG, Perkins loans, state money, (all which have their own eligibility and availability and absolutely cannot be taken for granted. and also loans from private lenders for school (usually needing both student and parent to co sign, and depend upon credit and approval. </p>

<p>3) I know of zero FAFSA only schools that guarantee to meet need as defined by FAFSA EFC. So that EFC is really the minimum you will be paying and your student still getting government subsidized loans/grants/workstudy. </p>

<p>4) Schools that guarantee to meet 100% or most of need tend to define that need themselves through PROFILE or their own forms or supplement. The institutional need usually is not as much as what the FAFSA need would be because that process count things like owning a business, non custodial parent financials, sibling assets, primary home equity that FAFSA excludes.</p>

<p>5) Because of all of these factors, and because of merit money (scholarships) as well as different prices for various school, it can vary widely as to what college can cost. My kids have varied from coming out ahead or zero cost to $60K+ per year in cost. </p>

<p>Some basic things that others have covered. FAFSA, which is the form for federal aid and what most schools use to come up with a need, though most schools won’t guarantee to meet and do not tend to do so, requires the parent and the spouse of with whom the student lives with the most, separate from any tax filing status or custody agreements, to be the ones filing. If your daughter and/or stepdaughter lived with you and your wife more than with their other parents, then you and your wife have to file FAFSA with your income, business info (if required by the directions) and assets. You fill a separate FAFSA out for each student so if both your DD and stepDD are heading to college a given year, you will file for each one using the same PIN (for which you apply) for each student, and each student also applies for a PIN and fills out her own FAFSA, though the part for the parents would be the same for each one if you and wife are indeed the custodial parents by FAFSA definition. The FAFSA will ask how many students you will have in college that school year, and with two, the parent part of the EFC will be cut in half. </p>

<p>You can estimate what your EFC will be using estimators. Those colleges using FAFSA only for financial aid will look at the student’s EFC and then decide how much they will give in terms of financial aid packages. </p>

<p>I want to add that I have a friend who is reasonably well to do and whose ex is not. For the crucial year before filling out FAFSA ( in your case,this year, 2013, if your students will be seniors this fall) she took the trouble to make the effort and carefully document that student spent more time with the ex, so that the FAFSA could completed with that ex being the custodial parent and her assets and income did not show up on that FAFSA. That made her son PELL eligible (got PELL grant money which he would not have gotten at all with her financials taken into consideration) and able to get some subsidized loans and workstudy, plus some financial aid from state schools that looked at FAFSA only. For those schools that required non Custodial information as well which meant she had to report her income and assets, he still got the PELL and the subsidized loans since those are given by the government, not the schools, but he got no money at all from the schools themselves since they deemed that she was able to pay. </p>

<p>Any school that uses the non custoidal parents’ information as well, will require that your DD’s mother and her husband fill out a financial infor form as well as you and your wife and all 4 parents and steps have to report income and assets. The same will go for your stepdaughter for such schools–your info and her dad’s and her step mother would be required by such schools.</p>

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<p>Schools now have Net PRice Calculators that can often estimate what they expect you to pay, and at those schools that guarantee to meet full need and have no merit money, the numbers are usually quite accurate BUT in your case with your own business, the situation could vary. Not only would the value of your business likely be counted as a considerable asset, but a lot of the deductions you take will likely be added back in at PROFILE schools. I have seen some of the most so called generous school be very hard on those who own a business. The problem is that schools do not like to reveal what their methodology for financial aid, so even a pro is going to have trouble coming up with estimates for you since they can vary so much from school to school, situation to situation at the same school, and even student to student. Remember, the schools can do anything they danged well please with their own money.</p>

<p>I recommend you contact some of the schools that are on your DD’s interest list and ask if they will do a pre read of your financial aid. That can give you some ideas as to what they are likely to offer in aid packages. I know that Carnegie Mellon will do a pre read for sudents. That gives you some idea where you stand with PROFILE schools. Also you can look up which PROFILE schools do NOT require non custodial information. However, even some non PROFILE schools are asking for supplements for non custodial parent financial info.</p>

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<p>Some other details about which you might also take note. Your earnings will likely be checked against your tax returns for the designated year–2013 for the school year 2014-15. Your assets to be reported are as of the date you fill out the forms, so don’t do it on payday or when you are flushed with funds earmarked for other projects as such earmarks don’t count. They don’t care and if the money is in one of your accounts that day, that is the figure that is used unless you go through a whole appeals process which is a pain in the neck. </p>

<p>Also, for the students, it might be a good idea that they have accounts joint with you or your wife down as primary and that they reeimburse you for their costs and you use that as a college cash fund for them I say this because 20 cents of every dollar goes directly on to the EFC and college contribution figures for students with NO allowance whereas parents get an allowance and it’s 5.6% of assets over that amount that is figured in to the EFC and contribution figures. </p>

<p>Debts do not come into the picture in reducing income/assets, unless they specifically are secured by an asset. Like if you have a loan specifically holding a lien against an asset, you can report the value of that asset reduced by that specific loan. You cannot use general loans or debts and offset them against your assets. </p>

<p>I suggest that when your students start looking for colleges, that they start with those that are affordable in sticker price and possibilities first, and start including the lottery ticket schools that are selective in admissions and have price tags that mean entering the financial aid roulette, after the base has been secured with school, you know can be paid for. </p>

<p>Usually, families that are doing pretty well, upper middle class will find that their EFCs, are too high for their students to qualify for PELL which means the only guarantee at those Stafford loans of $5500. What I see a lot is that the parents are expected to pay about what the state schools cost, so that any financial aid from the private pricier schools bring down those costs to about what the state schools will cost. It can be maddening. Can’t win for losing, it seems. Merit money tends to get integrated with financial aid, and getting large amounts of scholarship offers is rare and difficult, though I do urge you do look at those schools with guaranteed thresh hold which are listed on this forum.</p>

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<p>IDOC is simply where you send a copy of your actual tax return and they in turn send it to schools that need it - CSS profile schools.</p>

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<p>Apart from the technical side of things, which others have addressed well, it’s a good time to start developing a strategy with your wife about how you will cover the girls’ college. Because D1 is a good student she would be desirable at schools where she is near the top of the stats range–a lot of LACs give merit aid to attract high-achieving students and build a stronger student body. Some state school honors programs do the same (even OOS). Just go into the process with your eyes open and know that even if paying $50-$60K a year is a hardship for your family, it might not “look like it” to the colleges. There are numerous posts every year from parents and kids who have the desired acceptances in hand but come up very short on financial aid because their EFC is too high.</p>

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<p>make a good living as a self-employed prof’l. W</p>

<p>Sounds like you’re an attorney, CPA, or something like that. Even though your business may not have physical assets, CSS Profile schools will likely put a value on your business (value of your clients, what your business would sell for, etc). Many of your deductions will also get added back in.</p>

<p>Just be aware that the NPCs do NOT work for those who are self-employed. You can try them, but don’t be surprised if the actual aid is much less than estimated. And, NPCs don’t take into acct where siblings are going to school. In your case, the step-D will be attending a CC. Don’t know if actual aid will consider that step-D’s tuition will be very low.</p>

<p>Can your wife work more hours to bring in more money? especially to help fund her D’s college costs.</p>

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<p>Just some specific to address that you directly questioned. If you and your W will be custodial parents to both students, your DD and step DD, those schools that are FAFSA only and do not require non custodial information, will be looking at both your income and W’s and assets for both of you. Steps are included fully. Same info for both DD and step DD for FAFSA, same PIN, just have to do it for both girls, in such a situation.</p>

<p>If either apply to schools that require non custodial parent info, you are going to have to get it for your DD from her mother and her current husband, and for your step DD from her father and current spouse. You can file a non custodial parent waiver and request that the info not be required, but you would need a professional who knows the family, like the school counselor, a social worker, minister, substantiate that the non custodial parent has totally abandoned his/her children. Not easy to get if there has been any contact and if they are not sitting in jail, but it might be worth a try.</p>

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<p>My advice here is going to be the same as for your other thread in the cafe. You need to target schools where your after tax income of $170,000 can pay the bulk of the college costs…because with that income, you will be expected to do so at most colleges. You are an instate resident of California which has a huge network of instate universities the UCs and Cal State universities. Surely in that mix, your should be able to find a college.</p>

<p>In addition, if your daughter’s SAT/ACT scores and GPA are sufficiently high, she could garner guaranteed merit aid at a number of schools which will soften the financial blow to you. The link to that thread was provided to you on your other thread.</p>

<p>For FAFSA purposes, you will be listing both YOUR and your current wife’s incomes and assets because the daughter lives with you. For any school requiring the non-custodial parent Profile, your former wife and her husband will need to complete the form (and yes…someone may question where their support is coming from).</p>

<p>I agree with others, considering your income, I would be targeting schools where guaranteed merit aid will be offered. And I would seriously look at your instate options.</p>

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<p>For any school requiring the non-custodial parent Profile, your former wife and her husband will need to complete the form (and yes…someone may question where their support is coming from).</p>

<p>And, if your ex and her H won’t fill out those forms, or their answers aren’t believable (living on air), then your D’s aid request will not get processed, and she’ll get nothing except a $5500 student loan.</p>

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<p>Wow. Awesome info guys. Not sure where to start with response, but here goes:</p>

<p>Mom2collegekids wrote, “A school isn’t going to give your child more money because her bio mom has no income. That would be crazy.” Why is that crazy? The fact that bio mom is a deadbeat means the whole burden falls on me. Shouldn’t that be taken into account?</p>

<p>My prof’l practice (law) has no value. One of my partners is much older than me and he has been looking into selling his share of the partnership. He says there is absolutely no market. He may just have to retire and get nothing in return for the “value” of his interest. The nature of my practice is mostly one-time clients. It’s not like I have business clients who throw perennial income streams. They are individuals who are mostly one-shot clients. How could that have a value? Accounts receivable, yes. But if I am disabled or die, the money stops flowing and the clients go elsewhere.</p>

<p>StepD’s father lives off the grid. He’s been in and out of jail. Don’t know where he is most of the time. He owes W @$30,000 in back child support for StepD so when he works, he works for cash under the table. If we can find him, I guess we can try to get him to fill out a FAFSA if he’s not high on meth that day. I’ll have to look into that waiver thing…</p>

<p>Good tip about timing of filling out the FAFSA. I pay quarterly estimated taxes. So my bank account may show $20,000 in what looks like savings, but it’s not really. It’s just money set aside to pay the next quarterly Fed and state income tax payments. I guess I should date the FAFSA right after I make the quarterly payments.</p>

<p>I borrowed some $ from my dad to help with down payment on the house I bought after the divorce. It’s documented and I’m making payments to him, but it’s not secured by the house as a 2nd mortgage. Sounds like maybe I should do that. Right now there is little or no equity in the house due to market, although that may be changing as prices are starting to rise in my area.</p>

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<p>*Mom2collegekids wrote, “A school isn’t going to give your child more money because her bio mom has no income. That would be crazy.” </p>

<p>Why is that crazy? The fact that bio mom is a deadbeat means the whole burden falls on me. Shouldn’t that be taken into account?*</p>

<p>It’s crazy because if your ex and her H had incomes then the “family contribution” would be GREATER than it is with only YOUR income. Get it???</p>

<p>For example, if the situation is:</p>

<p>You and W2 income = $250k
Ex and H2 income = 0</p>

<p>then the school will determine that YOUR income and two kids in school means that you have to pay $45k for D1’s $55k college.</p>

<p>BUT, if…</p>

<p>You and W2 income = $275k
Ex and H2 income = $80k</p>

<p>Then schools will now expect that the total family contribution is Full Pay and pay the whole $55k. So, how would that benefit you? your ex would pay the $10k and you’d still be expected to pay the $45k because you make a whole bunch more.</p>

<p>You’re assuming that the family contribution would be same, but shared. No, the family contribution would be more, so you’d still pay the same. You couldn’t expect your ex to pay half, right? not when her income is 1/3 of what yours is.</p>

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<p>In-state schools will not be a money saver for this family - they’re not going to qualify for state aid and California schools are expensive! There are a handful of merit awards available for the UC’s, but they are few and far between.</p>

<p>I still believe this family’s best option is to focus on private and out-of-state public where the kids would qualify for substantial merit aid.</p>

<p>(And, yes, CA schools might be an option for your current junior if she were to spend more than half of the current calendar year living with Mom, since CA state schools require FAFSA only, and would only consider only Mom’s income. But would you really want to upset the applecart this way??? Also, this would not work if someone else is paying X & Hubby’'s bills - that would be treated as income for FAFSA purposes.)</p>