<p>I was recently admitted to a school that has a reputation for very generous 100% need met financial aid package (Vanderbilt). However, upon receiving my Financial Award Notice letter, it would seem either I have fundamentally misunderstood how the college aid process works or that there has been some sort of error. My familys income is quite low (around $40,000 a year) and my FAFSA EFC was 4,500. I realize that colleges like Vanderbilt use a different formula for calculating EFC than the government, however I do not think the college EFC policy is taking the FAFSA EFC and adding an extra 0 on the end. According to my package, my family is expected to pay around $43,000 a year, which keep in mind is higher than my parents entire annual income. I would really appreciate it if someone could explain how this is possible, or if I should try to appeal my aid award.</p>
<p>Call the financial aid office. They will likely just ask you to fax in a letter of appeal. Congrats on ur acceptance!!</p>
<p>Thanks for the advice! My only concern with that is, according to the Vanderbilt site ( [Revealing</a> the Numbers | Undergraduate Students | Office of Financial Aid | Vanderbilt University](<a href=“http://www.vanderbilt.edu/financialaid/undergraduate/revealing-numbers.php]Revealing”>Revealing the Numbers | Undergraduate Students | Office of Financial Aid | Vanderbilt University) ) the lowest aid package awarded to an individual in my income bracket would have, once subtracted from the cost of attendance, also put that individual in my same situation where EFC exceed total income. Is there any other possible explinations?</p>
<p>What was on your CSS Profile? Do you own rental properties or any other real estate? Are either of your parents self employed? Do you have any investment income? You need to look at your profile and make sure that you didn’t put a wrong amount (like adding an extra zero) to the income or asset amounts.</p>
<p>I do have one parent who is self employed and rental income, however both of those are included in the 40k figure I mentioned earlier. Also, I will be sure to double check I did not accidently mis-type any financial information. Thanks for the tip</p>
<p>Yes, call the FA office and explain the difference between the EFCs. They will tell you where the difference comes from. I did this with my school and I found out that that was because I put a larger number in the CSS profile where it asked how much your family are able to pay or expected, I don’ t remember. My school finally correct my EFC and I think your FA counselor will also be glad to help you.</p>
<p>I agree with Thumper. Financial aid (and in particular aid that requires the CSS Profile) is not based on income alone. Assets, a business, rentals, etc. come into the picture. It could just be a mistake, or it could be that you were expecting the FAFSA EFC to be roughly the same contribution the university expects, when that is not necessarily the case.</p>
<p>Often the FAFSA EFC is smaller due to the elements above, or due to a non-custodial parent, or some other thing. And while the FAFSA EFC may be lower, schools that use only the FAFSA tend to give far less aid.</p>
<p>On the rentals: the rental income may be included in your $40k, but the units are real estate assets. Also a factor.</p>
<p>The only way to really know
Is to contact Vandy and ask. We can speculate on some of the possibilities…but they will know!</p>
<p>The equity on the rental properties SHOULD have been in the FAFSA too. Was it? It is an asset!</p>
<p>How about your primary residence? Does your family have significant equity in that home?</p>
<p>What was your family’s gross income? I’m going to guess that it is significantly higher than $40,000. You may find that some of the deductions allowed on your taxes were added back as income for financial aid purposes. This would be true for both the business your parent owns as well as for the rental properties.</p>
<p>Also, if any pretax monies your parents contributed to retirement accounts in 2012 are added back as income.</p>
<p>I do have one parent who is self employed and rental income, however both of those are included in the 40k figure I mentioned earlier</p>
<p>Unless there’s been a big mistake, the problem could be:</p>
<p>Your parents’ business has deductions that the school is “adding back in.”</p>
<p>Your parents’ business has value. Is there a bldg? Equipment? Inventory?</p>
<p>Your parents’ primary home has a lot of equity. (does it? FAFSA doesn’t count home equity, but CSS does).</p>
<p>Your parents have a lot of money in retirement accts.</p>
<p>What is the value of the rental property? Is there a lot of equity there?</p>
<p>Thank you everyone for your help! I have contacted the Financial Aid Office as was recommended, so hopefully this issue should be sorted out.</p>
<p>Call them! They are bad at responding to emails…</p>
<p>Well, after hearing back it would seem that the most likely cause is assets. However, now I am quite confused as to how real estate and business equity could have such a large impact. According to the numbers their financial aid office gave me, their EFC calculator expects my parents to somehow “use” these assets to generate $38,000 a year. I would genuinely like to know what the word “use” means in that context. Are my parents expected to sell their business (which would place us below the poverty line in terms of income) or take out a reverse mortgage?</p>
<p>For a house it would be a Home Equity Line of Credit, for a business it would be borrowing against the value. It must be a substantial set of assets.</p>
<p>Remember that for the rental and the business they are probably claiming depreciation of their property. Thus the true profit from both is larger than it appears on their tax return. If they are claiming $10,000 in depreciation, that is $10,000 that they have as income that they are allowed to exclude from their taxes, but they still have that money (and are probably reinvesting it in the business or rental property).</p>
<p>All of these comments have been really quite insightful. I’ll be sure to look into all of the suggestions, as already one of them has led me to find a substantial oversight in my CSS application. </p>
<p>Unless anyone else has anything pertinent they would like to add, this thread may be considered closed.</p>
<p>Do you have any offers that are more affordable?
It isn’t unusual for school that use PROFILE to expect families to borrow against assets to cover educational expenses.</p>
<p>EFC is often 1/4 to 1/3 of income BEFORE any taxes.</p>
<p>It’s been a huge problem for a number of folks here when they got their financial aid packages when their parents own a business. The FAFSA EFC does not take that into account, nor are the NPCs set up to give reasonable estimates on what such families are expected to pay. Basically a lot of things that are deducted for business purposes are added back into the income and some business assets are considered assets even though they may be needed to keep the business going.</p>
<p>Friends of ours ran into this when they reported ownership of rental units which were where the family income was derived. To sell the units would mean losing the income they generate. To borrow against them means the loans have to be repaid out of the income that is supporting the family. Too bad,was Harvard’s response. </p>
<p>So, you do need to ask your parent or the family accountant to set up a phone appointment and discuss the matter with financial aid and see if any concession can be made when it is clear that the business needs the assets and deductions to generate what it does. No guarantee that it will work, but give it a try.</p>