<p>My dads salary is fairly high and therefore I'm not sure FAFSA would be any benefit to me for college. My dads salary unfortunately cannot provide full tuition costs for a typical university looking at the huge amounts of debt we're in. </p>
<p>Will FAFSA consider that we're in debt? Do they have a section on the application for that, or do they at least ask about it? </p>
<p>Another problem is that we don't have any official documents or whatever stating the exact amount of debt, maybe my fathers credit card companies may provide little detail concerning that but he owes money to other people.</p>
<p>^really? I thought that there was a section asking about amount of debt for mortgage, cars, etc…But I guess that overall amount of doubt is not taken into consideration</p>
<p>Your mortgage will be deducted to get to a home equity number but they consider debt, except for perhaps unusual medical debt (this would require a professional judgement appeal), a consumer choice irrelevant to the process. No aid given because you have a big loan on the Mercedes. Shucks! We’d otherwise have 3:)</p>
<p>Debt is only taken into account as far as it reduces the value of a reportable asset. For instance a mortgage against a piece of real estate reduces the reportable value of the real estate. A debt that is not directly against reportable assets is not taken into account for FA. For instance credit card debt, parent student loans, loans for cars etc are not taken into account.</p>
<p>Parent student loan debt is not considered by FAFSA. As stated above, the only debt that is considered by FAFSA is debt against a reportable asset and only then as far as it reduces the reportable value of the asset. So a house (not primary home as that is not reportable on FAFSA in the first place) that is valued at $300,000 but has a $120,000 mortgage against it is reported as a $180,000 asset.</p>
<p>^^^^even then that is not automatic. The medical bills cannot be reported on FAFSA, but the student can request a special circumstances adjustment from the school. It is at the school’s discretion whether they will make any sort of adjustment.</p>
<p>Students, if your family has a good income, but has a lot of debt obligation, then paying for college is going to be a problem.</p>
<p>Schools are not going to give you need-based aid because your family has debt. Schools don’t care if you have a high mortgage, credit card debt, debt to others (3rd parties), or student loan debt.</p>
<p>If you need money to go to college, then you need to apply to the schools that will give you good merit for your stats. However, many of those deadlines are very soon (like Dec 1st) for scholarship consideration.</p>
<p>A family with a lot of unsecured debt (like credit card balances) should empty out their cash accounts, sell stocks and bonds, and sell or mortgage other assets wherever it’s reasonable to do so, in order to pay off as much as possible of those debts prior to filling out the FAFSA. This is a legitimate way to reduce your reportable assets, and in fact it more accurately represents your financial situation. (You can go back to the high-debt, high-asset situation later, if you have profitable uses for those assets.)</p>
<p>There is NO PLACE on the FAFSA for any debt information to be reported. There is NO question regarding cars or the mortgage on your primary residence on the FAFSA.</p>
<p>Questions about your primary residence appear on the PROFILE but not the FAFSA. I believe that some colleges have supplemental questions on the Profile regarding cars.</p>
<p>Yes, that is a legitimate strategy but it is not advisable for everyone. There are obvious risks and everyone needs to determine if that is right based on what they have, what they owe, what expenses may come up. One should not manage debt based only on FAFSA but look at the finances holistically as to what makes most sense.</p>
<p>mazewanderer - so true; I think one of the biggest problems is that people don’t look ahead far enough or have a realistic idea of what their kids college will cost them.</p>
<p>Although our state school was very generous with a scholarship, I was glad to use the Profile with others, it helped a great deal. I was able to put down we already had a home equity mortgage, car loans, our small assets, etc. I think it helped much more than just the fafsa…if it wasn’t for scholarships, those schools would have been very high.</p>
<p>I have heard some say they hated filling it out, but if you don’t have much, I think it does help. If you do, I can see it as a large magnifying glass…so it cuts both ways.
We don’t have other homes, extra money in trusts, new cars, large IRA’s, money from relatives, etc. That might not be a good thing, but at least it asks, the fafsa is just a few numbers.
My sister was able to explain why, although she was a nurse now, for the last decade or more, made much less, was a receptionist and that is why her savings, etc was so low and explain some higher medical bills.
She felt in her case, it helped, because others with similar gross income she knew had to pay more because they had more assets.</p>
<p>aren’t they essentially looking for a financial statement showing net worth plus current yearly income? they would then subtract retirement accounts from the net worth?</p>