<p>Hi guys so I applied ED to Cornell, my dream school, and got in. My parents and I had a long talk prior to senior year about colleges and Cornell. They used the online estimator and said that the tuition would be around 20,000 and that it is affordable. Today I just received the Financial Aid package and it says that we will receive 17,000 making the EFC 43,000. I am pretty sure that my parents can't pay that much as they only make $60,000 combined. They are both working without any degree and they work very hard, around 80+ hours a week. We do own an apartment in NYC and have a house we are paying off right now. I am going to get a job very soon. I am really stressed about this when I should be happy, is there anything I can do? The EFC is 75% of my parents income, is there any chance that there was a mistake?</p>
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<p>This is probably why your EFC is that much. Cornell does count home equity in its calculator, and the non-primary residence (whichever one you’re currently living in) is considered an asset that could be sold to pay for your education. You can appeal the FA office, but also make sure you’re working on RD apps if you need to cancel your ED admission.</p>
<p>Still, would an apartment equate to that much of an added amount? My parent’s savings accounts aren’t that high and even selling it probably wouldn’t help pay off 160,000 for 4 years if they would like to retire at all. RD is just around the corner and I haven’t started any additional supplements because I was accepted. Would an appeal be beneficial if my parents were unemployed for the past 6 months and are starting a new job which will equal to even less total income?</p>
<p>How much is that apartment worth? In NY, it could be near a million dollars. That asset could add a very significant amount to your family contribution. Did you include that when you used the Net Price Calculator? If not, you should have. How much is the property worth, and how much do your parents still owe on it. The difference is the equity. That is the amount reported…unless I have it wrong.</p>
<p>If they rent the apartment to others, the rent is income. Again, that could be a huge amount per year.</p>
<p>Are your parents self employed? do they own a business? That too can have an impact.</p>
<p>Contact Cornell…they will be able to tell you why your family contribution is as high as it is.</p>
<p>And just an FYI…the Net Price Calculators are NOT accurate for families who own real estate in addition to their primary residence (like yours), who are self employed or own a business, or are divorced.</p>
<p>I think you need your parents to look into this. I’m a bit surprised that the Net Price Calculator would be so far off and I’m wondering if your parents filled it out right.</p>
<p>Do they own a business, do you have a non-custodial parent or were you talking work income without including rental income or a bunch of unusual deductions (in other words, $60K after taxes but a lot more before)? </p>
<p>The equity of BOTH homes, the house where you live and the apartment, and any savings not in a retirement account would be assessed at 5.4% after your parents asset protection allowance. If any one of those is high (which may be since property in and around NYC is expensive), it will raise your figures.</p>
<p>When your parents filled out the information, did they use 2012 income or 2013? Honestly, if your income dropped, you may get a bit more aid but the figures are so high compared to income that it’s pretty clear that income isn’t what the issue is. You need to figure out why Cornell thinks your parents can afford that (probably property equity) and then have your parents talk to the financial aid office.</p>
<p>You probably need to start preparing your RD applications since, realistically, Cornell is unlikely to suddenly give you a whole bunch more aid. Don’t wait for your parents talks to finish with Cornell to start readying your other applications.</p>
<p>Actually that 5.6% assessment is a FAFSA assessment and it is ONLY for the secondary real estate, not the primary home.</p>
<p>BUT the rub is…Cornell is a Profile school. They can use any %age they please to assess things like secondary real estate. Some Profile schools also assess a portion of the PRIMARY residence (not on FAFSA but IS on Profile). I don’t know if Cornell does or not. Of Cornell does use primary residence equity, then this could also add to the calculation.</p>
<p>OP, you say your parents got laid off six months ago? Did that really happen? And they still allowed you to apply ED? Without jobs, even a $20,000 per year cost would have been steep.</p>
<p>@thumper1:
My parents never told me but I’m guessing around 700,000. We did include it and that is one mistake that may have happened, we put the full purchase price of the house down during the CSS. The apartment is rented but very little only around 1,000 per month I believe. My parents own their own business.</p>
<p>@2collegewego: No non-custodial parents. My parents own their own business and 60,000 is before taxes. Because it was ED, they used 2012 figures which were marginally higher than 2013 as this was before their unemployed period.</p>
<p>Thank you for the responses, any tips are appreciated. I will talk to them tonight when they get home. Does Cornell expect my parents to sell the one thing they have as an investment? Their savings accounts are practically nill. This is my dream school and it’s where I’ve wanted to go for my whole life.</p>
<p>???</p>
<p>You own an apt that your parents paid $1M for yet it rents for only $1k a month??? What???</p>
<p>You have two problems…</p>
<p>1) Your parents own their own business. They likely take a LOT of deductions and Cornell adds those back in. The fact that they were ablet to buy a million dollar apt and your home suggests that their income really is higer.</p>
<p>2) The apt’s value is a huge asset. Most people don’t have an asset worth that much. Are you saying that they bought it for a million but it’s worth less? How much do they owe on that? or do they not have a mortgage on it? </p>
<p>3) The property taxes on a Million dollar apt would be very high. Plus the mortgage and taxes on your other property. Something’s not adding up. If they truly earn $60k BEFORE taxes, and they have these expenses, then how can they pay $20k per year for college?</p>
<p>4) What is the business? The business has a value.</p>
<p>Just taking 5.6% asset value on $700,000, your family contribution would increase by over $39,000…and it could be higher than that because that 5.6% is the FAFSA asset assessment.</p>
<p>That does not include the $12,000 a year rent (which is VERY hard to believe. You can barely rent a ROOM for $1000 in NYC…never-mind an apartment.</p>
<p>As noted, the value of the business MUST be included on the Profile. and lastly many business owners find that many of their allowable deductions for tax purposes are added back in as income for financial aid purposes.</p>
<p>Do you own your primary residence as well? I would agree that something is NOT adding up here…not at all.</p>
<p>Cornell is NOT going to give you need based aid so that your family can hang onto exoensive secondary real estate investments. That is NOT the purpose of need based college financial aid. The school views owning this secondary property as a choice. You could sell it, or borrow against it (although if your parent income is REALLY $60k, that might not be an easy task).</p>
<p>Between owning your own business AND having that second piece of real estate, there is no doubt that the NPC was NOT going to be accurate.</p>
<p>Thumper, yes, as I wrote, Cornell DOES use primary residence equity in its calculations. </p>
<p>BigRed, the issue isn’t the purchase price; it’s the equity (what the property is worh - mortgages). So if your parents have a lot of equity in the property, yes, you would be expected to be able to tap into that equity to pay for college. Plus, the rental income is income so if you didn’t include that in the $60K, it needs to be included. But, again, Cornell ALSO uses the equity in your primary residence. If you have $700K worth of equity in an apartment and also own a home, I imagine your parents assets top a million dollars and Cornell isn’t going to ignore that. (And, frankly, I have a hard time seeing how the Net Price Calculator came up with only $20K with those figures. I really wonder if they filled out the NPC correctly.) </p>
<p>The other problem is that your parents own a business. The $60K may be before personal taxes/deductions but it’s after business expenses and deductions. Some colleges look at what was deducted from the business and can add that in. I don’t know if that happened or to what degree Cornell does that but this is why everyone says the calculators are not useful for the self-employed.</p>
<p>And I agree with mom2ck: an apartment worth $700K should rent for a lot more. Maybe that $1K a month is after rental expenses like taxes, any mortgage, etc. If so, the college MAY add some of those back in. </p>
<p>If your parents do, in fact, have over a million dollars worth of real estate, I don’t think you will be able to do much on an appeal. You need to find out if your parents can afford Cornell and base your decision on that. If they cannot, you need to ask to be released from your ED contract and apply elsewhere. </p>
<p>By the way, not every school of this caliber uses primary home equity in its equation. There are a lot of warnings on this board about applying ED if you need substantial financial aid and one really good reason is to be able to compare awards. I will link an article you may find interesting. It is three years old so I don’t know if it still applies but it should be of interest to you and anyone else who is considering Cornell and finds this thread in the future. </p>
<p><a href=“Home | Cornell Chronicle”>Home | Cornell Chronicle;
<p>I will be talking to them later today and bringing the results back in. I am sorry for stating the the apartment is 700,000, the complex is 700,000 and it is divided in three parts with my parents owning one part, so the apartment is around 230,000. I am not sure about the tax reductions, ect about their business though. I do know that they work many hours and that it is not extremely profitable.</p>
<p>BigRed, that is what it is worth. Is that what the equity is? And what is the equity in your home?</p>
<p>If your parents business has a low gross (so let’s say it only brings in $76K and they only deduct $16K) and almost all of your assets are in your PRIMARY residence, you may be able to get Cornell to budge a little-- some schools cap home equity on moderate and low income families (which is why it’s good to be able to compare offers)-- but it sounds like you need another $20K a year to make it work and that sounds unlikely.</p>
<p>Please have your parents double-check the forms to make sure all the figures they put in were accurate. I suspect the problem is all the real estate equity plus the business but it’s worth double-checking.</p>
<p>Yes, the equity is ~$230k because we own it. I’d say the total amount that we have placed in our home is around ~120,000? We have lived in this house for 4 years so I’m just guessing right now.</p>
<p>Do you mean your parents own it without a mortgage? If so, yes, what it’s worth is the equity. Are they even able to sell their part or do they own a third but it’s family-owned or something like that? </p>
<p>Your situation is complex enough that you really need your parents to deal with this directly with the financial aid office. They need to double-check their figures and see if there’s anything they forgot to bring up. Unless there is some sort of error, most of the people who report back from these negotiations say that either the financial aid offer stood or, at best, the school raised their offer a couple of thousand dollars-- and that’s often when the kids have competing offers to show. We don’t usually hear from people who say the school has now given them an additional $20K in grant money. So talk to your parents and see what they can afford. If you need another $20K a year, this may not work.</p>
<p>My parents said that they will be able to pay for Cornell. I can’t help the feeling that I’m being a spoiled brat though. Would it still be a good idea to call the financial aid department to ask for a little more in their offer? Also, this is just an estimate correct? The real package will be received when the FASFA is filled out in January, right? Thank you for all the responses, you have all been very helpful.</p>
<p>If your parents pretax income is $60,000…after taxes, they will be bringing home much less than your cost to attend Cornell. If they can pay $40,000 plus and are only grossing $60,000, there is a huge missing piece to their finances that isn’t here. We don’t need to know it…but really…do the math. </p>
<p>Is it possible there is a 529 or other college savings for you?</p>