Dilemma...Dilemma

<p>So prior to applying ED to Cornell, I used the financial aid calculator is everything (I even over-estimated), EFC can out to around $8,900 which is really good. A few days ago I received my aid decision which had a EFC of $69,000!!! Here is my situation, parents make around 25k every year for the last 3 years. I know Cornell counts home equity, my parent's house in New York City is worth around $1,000,000 (according to Zillow) but my parents have a $150,000 mortgage on the house (Originally purchased for around $650,000 in 2001). Cornell also asked for my parent's businesses tax. They are apart of 3 businesses but they own no more than 25% of each and each business had losses in 2013. The businesses own 2 property, combined value of $450,000. My parent's also have another loan of $100,000. I don't understand how the EFC is SO much. Can anyone provide an insight to if I can appeal? Thanks</p>

<p>Of course you can appeal. Everyone can appeal.</p>

<p>The fact is that your parents have a lot of assets, and the businesses have a lot of assets. You need to figure out if you included all the assets in the right categories and then account for their income and expenses. There aren’t many people who live in NYC and only make $25k AND live in a million dollar house. They are probably questioning how that can happen.</p>

<p>The NPCs are often not accurate for those who own businesses due to the deductions, losses, depreciation that one can take from taxes that gets added back at a lot of PROFILE schools. Also the business itself is often valued. In addition, your parents’ home is assessed at about $45K towards the expected contribution using the FAFSA asset allowance max of about $50K and 5.6%. </p>

<p>Before you can appeal, you need to understand how Cornell arrived with the numbers they did. The house right off comes to $45K so it isn’t going to take much more from the business to jack it on up to $69K. You need to schedule a call with a fin aid officer and got through the numbers and see what can be adjusted. Generally debt is taken into account except against secured assets like a mortgage is on a house. </p>

<p>Your family owns part of several businesses, you have very significant equity in your primary residence ($850,000 is very significant equity). </p>

<p>I’m guessing that their AGI is $25,000 but their net income is far higher…could that be correct?</p>

<p>@twoinanddone When my parents bought the house they were making around $200,000 a year and then the recession hit. They purchased the home in 2002 and the housing price in NYC has risen every year since. </p>

<p>@thumper1 their net income is a bit more…around $37,000.</p>

<p>What is their GROSS income?</p>

<p>@thumper1 around 30 before taxes</p>

<p>Um no. Your net income cannot be MORE than your gross income.</p>

<p>What is their income before they take ALL of the deductions for all of the businesses and properties?</p>

<p>No one is going to believe that that is your parents’ income. Property taxes alone on a $1M would eat up too much of their income. Do you realize how much property taxes are on THAT property? </p>

<p>The mortgage payment would also be another $500 or so a month. </p>

<p>PLUS the monthly payment on that OTHER loan for $100k.</p>

<p>So do the math for the above: how much per year are they paying for: property taxes on the main home, mortgage on that home, payments on that extra $100k loan…once you add THOSE 3 obligations, what the heck would you be living on?</p>

<p>How much does your family have in savings?</p>

<p>Your parents are likely earning more than they’ve let on and your school realizes it. </p>

<p>And, they have a good bit of assets.</p>

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<p>I doubt you over-estimated…if you had included all that home equity, plus all the values of the other properties and businesses, you wouldn’t have gotten that low result. </p>

<p>Did you include $850k in home equity plus the other assets???</p>

<p>@mom2collegeboys My home is 3 separate stories so the other 2 stories are rented. My family have around $500,000 in savings plus another fund around 750,000 but that does not start until I turn 22. Prior to the recession, my parents used to make around 200,000. After 2010, my parents started making less and less. </p>

<p>@thumper1 oh sorry, around 45k</p>

<p>Your parents have well over a million dollars in savings? Seriously? </p>

<p>@thumper1 I believe so</p>

<p>@thumper1 about a decade ago, my father used to make over $600,000 after bonus and such. </p>

<p>I guess my EFC isn’t as weird as I think of it…thanks everyone.</p>

<p>Your EFC is high because your assets are HIGH. </p>

<p>(I even over-estimated)</p>

<p>uh…no you didn’t…</p>

<p>There is NO WAY that you put in that your parents have $1M in savings/investments and you got an EFC of $8900. </p>

<p>BTW…how much interest does that $1M generate each year?</p>

<p>And seriously…someone who is smart enough to get into Cornell should realize that with THAT much in savings, an EFC would NOT be $8900. </p>

<p>Did you talk with your parents about how much they are willing to pay each year?</p>

<p>OP- your dilemma is figuring out how to get your parents to sit down at the breakfast table with their financial information and decide how much they are willing to/can spend each year for college. The EFC is irrelevant- if they plan to give you 5K per year, than you need a very different application strategy. The likelihood that people with over 1 million in invested assets (not including a million dollar home and the other property) are going to qualify for much financial aid, even with a reduced income, is pretty small.</p>

<p>So forget about arguing with Cornell for now. Sit down with your parents and find out what the magic number is. Where those dollars come from- liquidating investments, borrowing against the primary residence, etc. isn’t the problem. The problem is you have no idea how much they are going to fund.</p>