So I live in a family of 5 and I, along with my brother, will be going to college next school year. My parents have an AGI of roughly $60k ($2k paid in taxes) with my dad making $20k in wages and my mom making $10k in wages. The rest is from a business my parents earn ($30k). On the FAFSA, I originally indicated $50k for my dad’s wages, but changed it to $20k because my dad makes less in wages and such. Our EFC went up 550 from 6250 to 6750. We have indicated that we do own assets which are valued at less than $250,000, but that’s about it. I am not sure what to do because it seems quite odd that a decrease in wages would result in the FAFSA giving me a higher EFC.
@billcsho, we never did. Our business is very small, so there is no need to consider that as an asset. We removed that income from question 88, which was originally question 88, which could have resulted in the EFC increasing by 550
We do make revenue from the assets, but from all of this, the AGI has stayed at roughly $60k.
I’m going to guess that with the decrease in earned income and the same AGI, you got less allowance for money paid in to social security. You pay less in taxes, your EFC goes up.
@ordinarylives, we get 0 for any benefits. We still paid $2k in income taxes. The rest was earned from rental real estate and the business. All was indicated on the tax return.
@thumper1, Sorry. I’m just confused with all this. We both have no idea what to put and this is the first time for my family.
I’m still wondering why is that EFC higher now. My parents can’t afford much. All they can contribute, at best, is $5,000. We really want to minimize as much loans as possible (already applied for scholarships). We pay those taxes and we indicated those taxes. We just didn’t indicate where the other $30k comes (66% from the business and 33% rental real estate)
EFC just is what it is. It is a formula. It has nothing to do with what you think you can pay or want to pay. At this point you just have to use the formula. There are strategies to try to maximize aid legally but it is likely too late for that. There is no way you can have business income that you don’t declare.
@BrownParent, this is based off of 2013 tax returns. I dunno if it will be too late to submit it with 14 tax returns. I made this mistake without knowing, so I was able to correct it with 13 tax returns.
@twoinanddone It is. Their value might decrease a bit so we will have to wait and see.
@kgos16, still waiting on that to come by. Haven’t sent my CSS profile to some schools too because of some personal issues and the 14 tax return. It takes longer because of the business.
Because the business income has a different calculation than income from a job. The business income is from rentals, correct?
BTW…was the $250k in assets the equity in the rental properties?
Just curious…why was your estimate of your dad’s income so wrong. There is a huge difference between earning $50k and earning $20k. What does your dad do for a living?
@mom2collegekids He owns a small home construction company that specializes in roofs. During the winter, he can’t work due to the bitter cold and weather here up north, so we have the rental property to help bring in income during those times.
The $200k in assets is just the estimated value rental properly. We dont need to count the business because its much less than 100 employees. Roughly $30k of the AGI comes from both the profit of my dad’s business and the rent from that property, the rest comes frim wages from my parents.
What is the equity of the rental properties? Is it the $200k (did you reduce the value of the buildings by the amount owed to the bank for the loans used to purchase them)?
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@mom2collegekids He owns a small home construction company that specializes in roofs. During the winter, he can’t work due to the bitter cold and weather here up north, so we have the rental property to help bring in income during those times.
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Right, but you’re saying that his annual income from his home construction business was only $20k for the entire 2014? The reason i’m asking is because you thought his income was $50k, and then you found out it was $20k…that is a huge difference.
All the FAFSA EFC tells you is if you qualify for the federal Pell grant. I think what will make a difference for your family is that your parents own a small business and they have an investment/2nd property. Some colleges will add back in expenses/deductions from the small business. And I thought equity in a 2nd property was assessed at 5.5%, so if your family’s rental property is worth $200k and your parents don’t owe money on it, that alone adds about $11k to your EFC.
If your parents can give you $5k each, with the federal student loan ($5500) you’ll have about $10k. If you can work over the summer you can earn a few thousand more. Do you or your brother qualify for merit aid at any of the schools you’re interested in attending?
My parents can’t afford much. All they can contribute, at best, is $5,000. We really want to minimize as much loans as possible (already applied for scholarships). We pay those taxes and we indicated those taxes. We just didn’t indicate where the other $30k comes (66% from the business and 33% rental real estate)