<p>Do financial aid calculators overestimate or underestimate the aid that would be given to families with small businesses?</p>
<p>I ran Cornell's calculator and it said that I'd receive somewhere between $20,000-$30,000 per year (I don't remember the number exactly), which is great because I didn't expect any aid at all. The reason I'm skeptical of its accuracy however, is the small business my dad owns.</p>
<p>We have had $0 household income for the past 2-3 years since my dad is currently running a business in loss and is not able to pay himself. However, we have just enough in the bank to pay for my entire college (but not my brother's who's currently still 13). Plus if we were to sell the business (we put the business value somewhere near $500,000 in the calculator), we'd have enough for him too. </p>
<p>So why would they give me so much aid if I'd be able to afford it anyways? Am I missing something? Is the calculator confused by the $0.00 per year income? I'm under the impression my dad entered something wrong, but if he didn't, is the 20k figure reasonable?</p>
<p>NPC’s do not work well for those who own their own businesses, so don’t trust the numbers you got.</p>
<p>Some of those deductions that your dad has for his business will likely be added back in as income. </p>
<p>If your dad has had 0 income for the past two years, then have you been living on savings? </p>
<p>I would think long and hard before I’d let my parents blow all their savings on a Cornell education unless we were all certain that this year and future years, the business would be doing well. </p>
<p>What is your family supposed to live on during the next few years while their money is going to Cornell?</p>
<p>Thanks for the quick reply. Yes, we have been living on savings.</p>
<p>I have discussed in detail with my parents about this, and they are confident that they will be able to pay full tuition if they absolutely had to (obviously they’d prefer a little aid though). If I don’t get any aid, I’m going to be working every summer for the next 4 years to help out as much as I can in. </p>
<p>Basically my Dad’s plan is to continue with the business for the next 6 months. If it doesn’t break even in this time period, my family will move to California (we live in India currently - I’m an American citizen though) and he’ll get a job there as a software engineer. He’s confident he can get a high paying job (>$200,000 according to him) again that would be able to support both the family and my college education as well.</p>
<p>So I’m fairly certain we can afford it, I just need to know if I’d get drastically less aid than the calculator says.</p>
<p>Edit: Saying they’d be blowing away all their savings is an overstatement, but yes they’d be spending a lot. When I said that their savings was just enough to pay for my education, I didn’t mean that after paying they’d be left with 0. I just meant that they wouldn’t have enough to pay for another 4 years for my brother.</p>
<p>*move to California (we live in India currently - I’m an American citizen though) and he’ll get a job there as a software engineer. He’s confident he can get a high paying job (>$200,000 *</p>
<p>Is your dad a citizen?</p>
<p>Either way, Calif is still a tough place to get a high paying job. I find it hard to believe that he can just move to Calif and get a job making more than $200k per year. That’s not likely.</p>
<p>Well obviously I don’t know much about how much he’d be able to earn given that I have no experience with this sort of stuff. However, before we moved to India, he earned approximately $400k+ and has a lot of experience in the IT industry. This was before the recession so clearly this isn’t nearly a reasonable figure anymore. Perhaps he’s wrong about the 200k figure. But I don’t think he’ll have any difficulty in finding a decentish job.</p>
<p>Should I expect much less aid than the calculator specifies though in my current situation?</p>
<p>As for as should you expect less than the NPCs indicate. Just be prepared for something different. Your dad has a company with big losses/deductions. Who knows what Cornell is going to do with those numbers.</p>
<p>Will colleges be able to even see from the CSS profile (or from FAFSA) that the business is in loss? I was under the impression they don’t know the net profit/loss for each year.</p>
<p>I also think you might be being overly optimistic. BUT that being the case, you need a well balanced list of schools on your application list, including ones where you might garner significant merit aid. If you really are a competitive applicant for Cornell, then you could get decent merit to soften the blow at other schools.</p>
<p>See the stickie above.</p>
<p>If you are a senior…get cracking. Many generous merit awards have December 1 application deadlines.</p>
<p>ETA…I see from other threads that you are applying to a number of very competitive colleges. I hope that you have some less competitive, sure things in the mix.</p>
<p>Also…just my opinion…if our family was living off savings…I would NOT be inclined to pay $60,000 a year for college…unless we had a bequest sitting in the bank separate from our other bank accounts.</p>
<p>IT salaries are not what they used to be before the recession… and the cost of living is high in California, so even with a $200K job (assuming he is thinking Silicon Valley), that isn’t necessarily going to leave enough to pay for a $60K a year education.</p>
<p>If you are going to apply for FA, it may make sense for you dad to write a letter to the FA office at each college explaining his circumstances IF he is truly losing money in his business. They are not accountants, and some schools (notably U of Chicago, but maybe some others) do not even ask for the business/farm supplemental form that gives some room for explanation. But $500,000 in value is a lot even if he is not deriving any income from it… still, it could be worth a shot if the money is all invested in buildings and equipment that could not be sold, etc. Or if he is only a part owner of the business without control over the sale or mortgaging of assets. Stuff like that is worth explaining in a letter.</p>
<p>@thumper, I understand that I might be sounding a little overconfident with our financial situation. To be honest, I’m not really familiar with these kinds of things and am just echoing my dad’s sentiments. I’m just assuming he knows what he’s doing.</p>
<p>Also, I don’t think Cornell (or any ivy) offers any merit aid, nor do most of my schools. I wouldn’t be competitive enough even if they did (4.0 GPA, but 1480/2190 SAT). However, I made sure to apply to a few universities I know for a fact I can pay for (namely Alabama (eligible for a full ride, I think), UMass Amherst which is a fairly cheap public school, and Case Western which I’m somewhat confident I can get merit aid at.</p>
<p>Okay…I’m going to talk to my parents about this again and see if they’re absolutely sure they can pay full freight. Do you think I should call Cornell and ask if they can defer my app to regular decision so I can compare financial packages? I feel like this might lower my chances of getting accepted but I guess this would be the smart thing to do in case they’re not planning to offer me any aid at all if I do get in.</p>
<p>I’ll look into the sticky for merit aid, thanks…didn’t notice it before.</p>
<p>__</p>
<p>@intparent, most of my schools require CSS too so we can’t exercise exclusion of the business I think. I’ll ask him to send a letter to each school, thanks for the advice. Would he need to attach official documents to prove loss over each financial year?</p>
<p>I don’t believe Alabama gives guaranteed full RIDES. I believe you would get full tuition, and if majoring in engineering an additional $2500 stipend. You would still have to pay for most of your room/board costs. But that $10,000 a year would be less costly than full cost of attendance at an expensive private university.</p>
<p>Profile schools will scrutinize your business finances very carefully.</p>
<p>Re: ED…the most important thing is NOT to put your family in hock for YOUR college education…in my opinion. If they have no income, and are living off savings, I wonder if they really CAN afford your college costs at full freight. Here is the deal…if Cornell does NOT offer you sufficient aid, you can decline the ED acceptance…but you are then DONE with Cornell. If you want to be able to compare Cornell’s offer to any other financial aid offers, you cannot do that with an ED offer from Cornell.</p>
<p>And something you won’t know…that offer from Cornell could end up being the best of the lot. But once you decline it…it’s gone.</p>
<p>Only YOU can decide…with your family…what the course should be.</p>
<p>I absolutely was not advocating excluding the business, only saying that FAFSA-only schools do not consider it based on the rules I linked to and that you might consider whether you should add any of those schools. All of the schools my D2 applied to last year required that the business tax returns be provided (even if they didn’t ask for the business/farm supplement). I think he just needs to consider what the reason is that he can’t take any assets out of the business and see if it makes sense to write to them with that information. “I don’t want to” isn’t a great reason, either… lack of liquidity, other owners, loans already taken out by the business, an anticipated business downturn because of the known loss of a major client, etc. – those are the types of things that might make a dent in an FA officer’s mind.</p>
<p>If your parents can’t for sure pay full price for four years (and remember the cost goes up around 4% give or take each year), then you are right to change your Cornell app to RD so you can compare offers and consider your financial safeties if you do not get any need based aid at all.</p>
<p>Also, I don’t think Cornell (or any ivy) offers any merit aid, nor do most of my schools. I wouldn’t be competitive enough even if they did (4.0 GPA, but 1480/2190 SAT). However, I made sure to apply to a few universities I know for a fact I can pay for (namely Alabama (eligible for a full ride, I think), UMass Amherst which is a fairly cheap public school, and Case Western which I’m somewhat confident I can get merit aid at.</p>
<p>At Alabama you’d get FREE TUITION…that’s not a “free ride” . If you major in eng’g or comp sci, then you’d get an add’l 2500 per year. Remaining costs would be about $12k per year. </p>
<p>I don’t think UMass is “cheap” for OOS students. It may be less expensive than Cornell, but it’s not “cheap”. I think it’s $40k per year.</p>
<p>You’re also going to have to buy health insurance here in the US…that’s a couple thousand per year.</p>
<p>Sorry, I meant free tuition. Nevertheless, we’d be able to pay for it certainly. I misread the UMass cost of attending (didn’t take into account room/board), so I guess that’s expensive too.</p>
<p>I talked to my dad, but he kept telling me not to worry about it. He told me not to defer my application to RD, so I really don’t know what to do now… because I don’t want to put him in the position of having to pay $240,000 for 4 years. I even mentioned that the calculator was probably inaccurate and that we may end up getting no aid at all, but it doesn’t seem to bother him. What should I do?</p>
<p>I owned a small business when my daughter applied to top schools. Yes, change to regular decision and compare financial aid packages. She applied to only 100 percent need met schools plus a financial safety at our great public flagship. Financial aid offers varied by 25K/year from peer institutions, some with near equal endowments. There is no way we could have predicted the financial aid packages.</p>
<p>So, ask him to sit down with you and explain exactly HOW he’s going to pay for Cornell for four years if you don’t get any FA. If you’re smart enough to get into Cornell, then you’re smart enough to understand the numbers. Tell him you won’t apply ED without an explanation.</p>
<p>Unfortunately, optimism alone isn’t enough to pay for four years of college … your dad is going to need the DOLLARS to back it up.</p>
<p>Okay, I understand. I’ll talk to him again.</p>
<p>If I back out of the ED agreement now (as in before a decision has been made), it won’t have any negative effect on my application right? And does nothing happen to my counselor who signed the agreement as well?</p>
<p>From all that you’ve said, your dad either has a LOT more money than you realize…or he’s super optimistic about how much he’ll earn if he ends up in Calif.</p>
<p>I don’t know if it’s been awhile since your family has lived in the US (or in the high-tech areas of Calif), but it is really pricey. A $200k salary (if super lucky to get) will be like a “middle income” family because such a huge chunk will be going to housing/taxes.</p>
<p>The fact of the matter is that even if you own a business that does not generate any income, the business could have a net worth because if you sold it, you could have the money. Maybe you own the building that houses the business, all of the supplies, equipment, inventory, not to mention the client base and infrastructure. If your father’s business is worht enough that he can live off of it for a while and pay all of a private college cost, you may well not be eligible for financial aid. It all comes down to how the individual colleges will assess it.</p>
<p>Read post 15 again and again. There is NO WAY to reduce variability of need based offers even at peer schools.</p>
<p>However, if you are willing to JUST have that Cornell offer…and are willing to make a realistic decision about affordability in the ED round (in other words…you are prepared to say NO if the money isn’t sufficient)…then don’t change your application. Your need based aid from Cornell in the ED round won’t differ from the RD round. BUT you won’t be able to compare offers from other colleges, which is very important for most families where finances are a concern.</p>
<p>P.S. if your dad finds that $200,000 IT job in the states, perhaps he can send some job info to the father on another thread who has done similar work and is moving overseas to find work…because he claims he can’t find a job here :)</p>