Hi all, so as expected our EFC is stratospheric – literally half of our gross income, more like 80% of our net. (This is because of an LLC that we are part owners in that has a big market value, but is not liquid at all - it’s a farm.)
I’m wondering about whether it’s worth it to file an appeal, just to be eligible for a subsidized loan, instead of just an unsubsidized loan. I have no idea what the threshold is for such a distinction. Even if we met it, I’m not sure that the amount of money we’d save would be worth the effort.
I was reading the ed.gov site and it actually says there that only ~$3.5k out of the $5.5k for freshmen (and proportionately the same, going along) is even allowed to be a subsidized loan.
So, for all the sturm und drang I could put myself through in appealing, can anyone tell me what amount of $$ I’m actually looking at saving?
On what basis would you appeal? Subsidized loans are federal loans, so colleges cannot make an exception to federal rules to allow you to receive a subsidized loan. If you reported the LLC the way FAFSA required, schools cannot adjust to remove it. If federal rules allowed ignoring that money, they would not have required it to be reported.
I understand how you feel. However, your efforts would be best spent looking for schools you can afford.
That is true…only $3500 of the Direct Loan can be subsidized. The other $2000 would be unsubsized.
You need to have financial need to get a subsidized loan. It sounds like you don’t have financial need at all due to your farm ownership. This happens to many owners of these kinds of properties.
Bottom line is…you are a part owner, and need based aid is not going to be given to you to support owning this.
I know…it doesn’t seem “fair” but there it is.
The interest on the Direct Loan total could be paid off by you or your kid (if your kid has a job) annually, thus sort of subsidizing it yourselves.
If this is a special circumstances consideration…that would need to be dealt with at each college. But it doesn’t sound like a one time event.
It’s really too bad @curmudgeon isn’t still posting here. He understood this issue well, and his kid looked for schools with excellent merit aid…no income or assets to be considered.
From what i’ve gathered with my own kiddos, you can only get a subsidized loan if your EFC is less than the COA, and if the school says its ok.
It’s interesting; my D16 got offered subsidized loans at one school and not at another (LAC) even though COA were basically the same her freshman year.
She has a $5.5K subsidized loan this year; the amount you can borrow goes up each year by a bit with a $23K max. You do save a little bit with subsidized, but not sure if it’s worth appealing your EFC from FAFSA. . . and like kelsmom (who’s a FA professional) not sure if you have a basis for appealing.
Yeah, even if an appeal were valid and successful, probably wouldn’t amount to enough to get us in positive need territory. School shows -$13k now. Meh.
I’ll work on inspiring the kid to get a job (we dont seem to be eligible for work study either, so she’ll have to pound the pavement herself.)
And as much as we can, we’ll pay the interest while she is in school.
How did you determine the value of the LLC and was liquidity taken into account? I am NOT a financial aid expert at all, but I do have experience valuing FLP, LP and LLCs for tax purposes and liquidity of both the underlying asset(s) and marketability of the LLC are taken into consideration.
@Gatormama Your D received a full tuition scholarship at WVU, right? That leaves approx $10K for room and board according to the WVU residence page. If she can find a summer job to cover maybe $2K of that, it would leave about $8K. Not a terrible amount to pay even if you have to take an unsubsidized loan. Are there other expenses that need to be covered?
@Darcy123 – I took the numbers off the lines on the tax forms that I was told to use. Our accountant deals with how those numbers are arrived at; I have no doubt that he did it correctly.
@scholardad – Well, there are “fees,” which are about $3k and aren’t covered by the scholly. The cheapest room and board is $10.5k. So about $13.5k, before transportation, incidentals, books, and a computer.
It’s not onerous and we are hugely grateful, But we have another kid in private school and I did want to explore whether it was worth trying for subsidized.
I see now that it really isn’t a legit appeal, so we will focus elsewhere – work, local awards, maybe – to nip away at the edges of the costs.
It’s family owned; we own 45%; the market value was set in an appraisal at the time of ownership transfer, and yeah, it’s just counted like any other asset; no exemptions/exclusions apply.
It’s an asset in name only that we can’t leverage at all. Sigh.
If she could be offered a subsidized loan, it would be a max of $3500 the first year, $4500 the second, and $5500 each of the last two. The amount you would save in interest would be the rate of interest (~4.5%) x $3500x 4 years, and then add the next amount for the next year, etc. It is definitely a savings if you can get it.
If the LLC wasn’t part of the calculation, would your EFC be substantially lower? If so, what you might ask for is reconsideration for other aid. There might be a departmental scholarsip or something the FA office can tell you about.
@Gatormama remember too…if your kiddo receives grants to cover room and board, they are considered taxable income. She might not have any tax liability…but they are taxable…because they are not a QEE.
Thanks @thumper1 and @mommdc - she is currently neck-deep stage-managing the musical, then the play, and working countless other tech-type jobs at the school (for which she gets minimum wage, but it’s very part time and basically pays her gas).
Once she gets past the play, she’ll have breathing room and then yes, a summer job is in the plan!
also remember that if your income is less than $180K (for two) – you can claim those fees on your taxes under the American Opportunity Tax Credit (AOTC). You can claim up to $4K/yr on fees/tuition/books and then turn around and get back $2500. (look up details as it’s a 1:1 ratio for the first few thousands) It’s pretty sweet.