<p>Don't know if I'm looking for advice, or just to see if others might be going through anything vaguely similar--</p>
<p>S1 is a sophomore at a very good private U. Working hard, happy, and getting more out of college than we ever would have hoped.
S2 is a HS Jr. Not quite the same level academically, but a well-rounded B+/A- student taking mostly honors and AP classes. Also have two younger daughters, though have some time before we have to start worrying about college for them, thank goodness.</p>
<p>Predicament is that income has decreased drastically. When S1 applied two years ago, H (self-employed) was making well over 2X what he is now. Had more work than he could keep up with. The larger problem, though, is that he went way over his head last year and took out a huge amount in loans on a real estate deal that has turned into a nightmare. I didn't even know about until he bought the stack of papers home for signing... Don't want to go into it, really, but it's going to be a long ordeal. I'm scrambling for work, but realistically will not be able to make much of a dent in the situation in the short term. I know we have another year before S2 applies to college, but am looking ahead.</p>
<p>H set aside college fund money for years, and had enough to cover several years worth of tuition. The remaining chunk of that money will come into play when S2 applies to college and applies for financial aid (i.e. income will be low, but they'll still see that remaining sum). Any info on how our current loans play into FA decisions?</p>
<p>You have a great deal of company! While we're feeling lucky for the moment, so many around us are reeling from job losses and income and assets plummeting. Those of us about 50 have lived through some pretty great economic times in general with a lot of wealth being built among our peers. This severe downturn has caught most off guard.</p>
<p>Don't make this any harder on yourself and your DH than it needs to be. This downturn will mean lots of kids choosing affordable educations as the NBC national news reported tonight.</p>
<p>I think private colleges will get more creative in how they look at assets or risk losing the ability to choose the class they want. Meanwhile, if the money is not all in college funds per se, maybe you can redeploy and pay down some debt?</p>
<p>For FAFSA loans only come into play as far as they directly reduce the value of a reportable asset. So if the real estate is valued at say $300,000 and the loan against it is $160,000 then the net value would be $140,000 which is what you would report as an asset. It is important to realize that only loans that directly reduce the value of an asset (such as a mortgage against property or a margin loan agains a stock account) can be used to reduce the reportable value. For FAFSA there is no consideration of any other debt such as credit card debt, or a car loan, or signature loans that are not directly against an asset etc.</p>
<p>Thanks. For the property in question he did take out a very large loan against our home.</p>
<p>As for colleges for S2, I do feel bad that he will not get the same choices his brother had, and public Us and SUNY admissions in this economy are going to be tougher than ever.</p>
<p>Ugh. For FAFSA your primary home is not a reportable asset anyway so the loan against it will not help you for FAFSA. However secondary homes and real estate are reportable assets. For FAFSA you would be better off, financial aid wise, if the loans were against the real estate rather than against your home. Otherwise you will have to report the full value of the real estate as an asset.</p>
<p>For instance if your home is worth $500,000 and was fully paid for that would still not be a reportable asset for FAFSA. Say you had a loan of $$300,000 against the home - the net value would be $200,000 but as it is not reportable it would make no difference. So having a loan against the home does not affect financial aid in any way. However, if other real estate is worth $400,000 and there is no direct loan against that real estate then the full $400,000 asset is reportable on FAFSA. if a loan of $300,000 were direct against that real estate then the reportable asset value would be reduced to $100,000 ($400k less $300k). Where the loan is makes a big difference for FAFSA.</p>
<p>We're in the same boat, too. D is a freshman at a private school. S is HS senior going thru the application process as we speak. My biggest frustration is how close to the vest some schools keep their financial award process. </p>
<p>I can't get D's school to answer the question, "With all the financial info you already have on us, suppose I already had 2 in college, what would your financial aid package have been?" </p>
<p>Other schools D applied to last year were more forthcoming, with the caveat that "nothing's binding", which is perfectly understandable. </p>
<p>I dont think we're making an unreasonable request. I just wish they'd better appreciate the position we're in. Looking to provide best opportunities for our kids. Just trying to get a handle on what's in front of us. We expect to get a better package from D's school this year. It would nice for them to confirm that at least in a ballpark sense.</p>
<p>Run your numbers through the exact formula, just like doing a tax return, you can run it different ways and determine the effect of your actions.</p>
<p>This is your FAFSA EFC- not profile and it does not mean you will not be gapped between EFC and COA, but it is a starting place and way to make sure you are maximizing your eligibility</p>
<p>Thanks for the responses and info. Am hoping the coming year will buy some time and bring better news before S2 starts applying. I know there are a lot of people out there in worse shape, but it's still worrisome...</p>