I am a junior looking at colleges and FA opportunities. I’m currently looking at many colleges, chief among them Caltech, UChicago, Swarthmore. These have good FA but my family only has about $15000 to spend total. My dad just started a company last year and made about $65,000. It is very small as of now with only him but he wants to employ soon and grow. How will this affect FA as I apply? Will aid change throughout my college career as his company changes?
You will be applying for need based aid annually…so yes…if your family income goes UP a the schools you mentioned…your need based aid would go DOWN.
For the 2018-2019 school year (which I think would be your first year in college) the 2016 income will be used.
But in 2019-2020, the 2017 income will be used.
In addition, if the business grows, presumably the value of the business will grow as well.
Okay, so that’s kinda bad news. I’m also applying to Questbridge next year. I am a higher income but still in the recommended range for Questbridge applicants and I have higher academics than many applicants. If I get in will this aid change as well?
There is a Questbridge forum here on this site. You might get a better answer there about what happens if you are accepted and your income rises.
I don’t think you will qualify for Questbridge with that level of income and ability to pay $15K per year unless you have a massive number of siblings. If his income was $65K and his business doesn’t have significant assets then you would probably get close to a full ride at UChicago. They do re-evaluate annually but if his earnings increase minimally they won’t change aid by much. My son is at UChicago and we got raises so his aid would have gone down a bit but they adjusted for an increase in COA so we are basically paying close to the same thing as his first year. Every school handles all this differently though.
Just to clarify we can only pay about $15k total (over 4 years). The business is worth, at his estimate, about 2k. I am still skeptical on if I’ll get accepted to QuestBridge. I filled out the calculator for UChicago and can go basically for free, but that is based on 2015 income. My brother will enter college my junior year of college so will that help aid?
For schools that meet need, another student in college will decrease your EFC (think to 50-60% of what it is now) and increase your aid. At some other schools the additional student may not get you more aid, even though your EFC changes. You need to contact schools on your list and ask them if aid gets adjusted when a sibling goes to college at the same time.
Financial aid is not based on what your family feels that they can only pay.
The school will look at your family’s income and assets (including the business). They will determine what they feel your family can afford to pay and will award aid accordingly.
You must apply for aid every year and your aid can change based on fluctuations in your family’s income and assets.
Also keep on mind that some deductions allowed by the IRS for business owners are added back in as income for financial,aid purposes. This usually includes things like phones, home offices, cars, food, because simply put…younwould have had those costs anyway.