<p>Which of these amounts does FAFSA consider? I've read some of these posts and am still confused. I'm interested in this aspect because my husband is self-employed, and his business expenses significantly reduce our AGI (he is a salesman). I earn $42,000 working for a small company. Neither of us has a pension plan and we have no savings (we've had some financial setbacks with a major illness and periods of unemployment). Our only asset is about $50,000 equity in our home. My husband is nearing retirement age (but will never retire due to our situation!) and I'm in my early 50's. I assume financial aid offices take this into account also. My daughter is a junior with outstanding grades and EC's, but hasn't taken the SATs yet. She has been talking about pre-law or pre-med, and has expressed interest in University of Pennsylvania and some of the top LACs in the Philly area, and I'm in something of a panic due to our financial situation. At our ages we can't take out huge loans, but on the other hand, feel that we must do anything we can to make sure she attends her college of choice. Any advice?</p>
<p>the EFC calculator on finaid.org and other sites can give you an estimate of your calculated need.
Remember that even if FAFSA finds your EFC to be a certain amount, that is not a guarantee that, her aid package will make up the difference between EFC and cost.
Most schools gap, or do not offer to meet 100% of need.
Some schools at the most will only offer subsidized or unsubsidized loans.
Even at schools that do pledge to meet 100% of need, aid package will be made up of any combination of work study, loans and grants. The more they want your student to attend, the heavier the package will be weighted with grants.
You need to establish how much you can afford to contribute to her college education every year, make it a transparent discussion, so it is clear what is involved.
If that figure is close to your EFC, and she only applies to schools that meet 100% need, then your problem is solved. HOwever, if that figure is much lower than what FAFSA will estimate that you can pay, then either she will have to take out large loans or find a lot of merit aid.</p>
<p>The financial aid formula does allow an allowance for the aid of the older parent. Generally it does not look at retirement accounts, IRAs, etc. It does look at gross income, but as was said above, try out the financial aid calculators & try borrowing some books from your local library (it's free there & you can get more detailed info). Many schools do include loans as part of the financial aid package--some ONLY include loans.<br>
If finances are a real concern, sometimes the state school options are very attractive & the student can transfer for junior & senior year, leaving only two years of expensive tuition instead of four. That's something we've mentioned to our children; I transferred as a sophomre, as did my brother. It was a substantial savings for our family. Many in-state schools also offer a semester or year away or abroad, which allows less expensive tuition, but still an opportunity to experience more variety than would otherwise be possible when staying in-state.</p>
<p>After you file FAFSA, you will receive a SAR (Student Aid Report) which includes your EFC (estimated family contribution). A familys EFC is a sum of a percentage of four factors: parents income, students income, parents assets, students assets. As to parents/ students income, FAFSA looks at adjusted gross income (AGI) from 1040s from the previous tax year. For example, for school year 2005/06, FAFSA looks only at parents/students AGI from 2004.</p>
<p>If your D only applies to schools that use FAFSA, home equity will be excluded. If she applies to a school that also requires the PROFILE, depending upon the school, home equity may/may not be considered.</p>
<p>Since you husband is self employed, I assume you file a schedule C form. This is good as this will reduce your AGI. You indicated that your D is a junior which means that she would start college in 2007. Id have your husband load up on his business related expenses during 2006.</p>
<p>In addition, Id have your D apply to the schools of her dreams, but also some safety schools (safety both from an admission standpoint, but also a financial standpoint). Once accepted, see what aid package they offer. Be upfront with your D about your financial situation.</p>
<p>In my experience, when you are self-employed, the schools want to see your tax returns, each school may choose to add back to your income certain items- depreciation, etc.</p>
<p>In my experience, when you are self-employed, the schools want to see your tax returns, each school may choose to add back to your income certain items- depreciation, etc.</p>
<p>we aren't self employed and we send our tax forms- inc w-2 and 1040 to school every year.
One year I even made a mistake and they corrected it in our favor</p>
<p>Thanks to everyone for your responses. They are all helpful.</p>