We have a similar problem, our FAFSA EFC is over 180,000 (!) - we have no IRA’s or any retirement accounts, but we do own income property. Does this seem correct? I did link it to the IRS so I’m assuming the #'s are correct, but this EFC is laughable when we are really living check to check.
You should start your own thread to get more eyes on this, but yes, owned income property can result in high EFCs. Run some Net price calculators at schools on your kid’s college list to get cost estimates at the school level.
Some schools will consider appeals if there are extenuating or unique circumstances…you would start that process by filing a ‘special circumstances’ form (or something like that), which some schools have on their websites. Basically you are asking the financial aid staff to apply ‘professional judgment’ to your financial situation.
I’m sure @kelsmom can add more insight.
What is the value you reported for the income property?
Split into new thread
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Because the home equity of your income property is a financial asset. Compared with another family with the same income who does not have income property, you have access to funds to pay for your child’s education. You can sell the properties. You may not want to, but that’s not the college’s problem. It’s like having money in the bank that you don’t want to use.
Why don’t you have retirement funds? Qualified retirement funds are excluded from the EFC calculation.
No offense, but Why doesn’t matter. The OP doesn’t have them and that’s not going to change before they need to pay for college. And the question “why” does nothing to address the reason they opened this thread.
I am hoping @islandmama1 will respond with the value of the income property. That answer will inform my response.
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Actually…I wonder what the equity they have in their rental property is.
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I have a similar situation. Gigantic EFC, own a 620 sf rental condo. My wife and I owe $0 on it. Not living paycheck to paycheck but the EFC is about a third of before tax income. I knew it would be that way as got $0 financial aid for my now college Sr and our financial situation has improved.
I also have kids that are perfectly four years apart so not having two in at once also has an impact.
I have a budget so some schools just don’t make sense, looking for merit at some and some in state/WUE schools are under budget.
The reported value was 2.6M, because we originally purchased it 20 years ago and we live in the Bay Area which has insane RE valuation. Where we live 900sf starter homes are going for 1M so it’s not like we are moguls. We don’t have a ton of equity in it due to years of refinancing (mostly for better interest rates). Our property is our retirement, and where we have invested our hard-earned money (and believe me when I say our line of work is very hard). That is why we don’t have other investment vehicles. Not claiming to be financial geniuses here, just looking for some thoughts as first-time college parents. Thanks for the non-judgmental help.
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How much equity do you have in this rental property? Also, what is the rental income for the year…because that factors into aid also.
Can you afford the instate costs for any of the CA public universities? You are fortunate to have so many good choices in CA.
Also. Any chance your college bound student has high grades and a high SAT or ACT score? If so, perhaps you should look at colleges where she might be offered significant merit aid. Merit aid (in most cases) does not factor in income or assets, and this could really benefit you…if your student qualifies.
It looks like your daughter is applying to Cal. If she has a sufficient GPA for that school, and money is a factor, you might want to look at Arizona or New Mexico where your costs to attend should be more reasonable than even instate costs for the CA publics.
Yes, she is applying to both UC’s and CSU’s and we can swing the in-state tuition. She is not interested in OOS. We were not sure we should even complete the FAFSA, thinking we would not qualify due to the investment property, but she has a couple of small LAC’s on her list that required it. Her GPA is strong so we are hoping she may qualify for some merit aid from the privates, but a UC would be her first choice and is affordable for us. Unfortunately, all the UC’s feel like a long shot, (and she’s not interested in Merced despite our encouragement) even with her as a solid applicant. It was just a shock to see the number, like I said, 1st time @ college apps. Thanks for your helpful comments! 
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Keep an open mind. Really…Arizona isn’t all that far away. Might be worth checking out.
By completing the FAFSA, she becomes eligible to take the Direct Loan. For freshmen, that is $5500. So…not a bad idea to keep that option open as well.
Good luck to her!
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It sounds like your property will definitely impact EFC, but make sure you value it properly. Report the value (what it would sell for less anticipated realtor/attorney fees related to the sale) minus the amount you still owe on the property. But yes, the EFC is definitely impacted by the property. You’ve had your moment of shock. Time to look forward & find a school that you can afford. Most of us feel your pain.
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