My child wants to apply ED to a need aware, but meets 100% of need school. My husband and I are both self employed–two different businesses. Our EFC are wildly different using the FAFSA (which gave more aid) and the schools NPC. I understand that many business deductions are added back in – particularly automobile expenses, which we have. Does anyone have any advice on what else is added back in? We have filled out the CSS but that doesn’t give you a EFC. We have very little assets (all have been plowed into the business) but income is high.
FAFSA doesn’t count your family owned and controlled businesses as assets and it doesn’t count home equity. Most Profile colleges count both, though sometimes home equity is limited to a multiple of salary (or ignored by a handful of the most generous colleges).
I hope that I am wrong. However, every small business owner, farmer, and landlord that I have talked to in the US has sent their kids to in-state public universities because that is all that they could afford. The exception was one couple for whom $75,000 per year per child was a small amount. Of course the situation is very different in other countries (or at least the one other country that I am familiar with).
I might be inclined to ask admissions at the school where your child is planning to ED. However, I would certainly try to have one or more affordable options in mind.
If you, your husband, and your kid are all on the same page about what your family truly is ready, willing, and able to pay, and if all of you are prepared to kick an unaffordable ED offer to the curb, then let the kid apply ED. If the money works, the kid is done. If the money doesn’t oh well. There are plenty of other good options out there.
If you all aren’t on the same page about this, and there are folks who would not be willing participants in any curb-kicking-to action, then ED is not for your family.
In my opinion…the single most important thing you need to figure out is how much YOU think you can pay for your kids to attend college annually. Then go from there.
In terms of things added back in for the self employed…my understanding is it’s things that folks do anyway…so “company car”, home office, home utilities for office, food, travel, clothing. But really it’s hard to say for sure as colleges might view these things differently…with some adding some of these items as income and others not.
If you are unsure about your finances, I’m not sure ED is a terrific idea. In addition, if your kiddo has merit aid potential, it’s very possible that regular decision applications will need to be submitted to those colleges well before the ED decisions come out.
Here is your rub if you do ED. You will have ONE financial aid award…and one net cost. It might be the very best offer your kiddo would get anyway…but it might not be. You will have no way of knowing. If you accept the offer, all other applications must be withdrawn and any other acceptances declined. So you are done.
If you decline the ED offer…you are done with that school. What if the RD offers are…worse.
Wouldn’t it be better, if you really aren’t sure, to have multiple offers to compare and consider?
?? What “more aid” did FAFSA indicate? What was your FAFSA EFC?? Your FAFSA EFC would have to have been VERY low for the results to show that you would receive any free money.
To be honest, ED is a bad idea for your family UNLESS you’re prepared to be full pay. Self-employed people can’t ever trust the Net Price Calculators since those are often “more generous” than reality.
How much can you pay per year?
The problem with ED is that your child will be singularly focused on that school. Then Dec, s/he may get in but then you’ll look at the FA package and see that you didn’t get much or any aid at all.
THEN you’ll have a problem because likely you’ll face that problem with all CSS Profile schools and many FAFSA schools will gap you. But then most of the schools that give merit scholarships will have deadlines that have passed for merit consideration.
If you decide to do ED anyway, then throw some apps to some schools (including some privates) that give HUGE merit with fall acceptances. Then in Dec, if the ED school isn’t affordable, you’ll still have the merit schools to fall back on if necessary.
OP, treatment of business income is going to vary a lot by school. I’d call the FA office of the school and ask. Most will communicate basic guidelines you can use to judge whether some of your business expenses will be added back as income. Most of the things are going to be pretty obvious—home office deduction, auto expenses, etc. If you’re making an employer contribution to solo 401 k or SEP, that might be an issue if you have a controlling share of the business; employee contribution will be added back in.
Thank you, that is very helpful. She is a “recruited” athlete with no athletic aid being offered, so at the least I am hoping the coach will be able to put me in touch with someone at the financial aid office. Interesting that employee contributions will be added back in.
@19and21 at most schools a recruited athlete can request a financial pre read through the coach. FA office will have you fill out all the FA forms and submit tax returns, then will give you an estimate of FA. Much more reliable for business owners than the NPC. This could take anywhere from a few days to a few weeks. I’d contact the coach ASAP about this.
@politeperson Yes, am going to request one tomorrow morning. What makes this even worse is that for the coach to use a “slot” for her she can not apply for financial aid. So she can either apply ED1 as a “regular applicant” and apply for financial aid, or have her application pushed through as a recruited athlete with no option for financial aid. We learned this on Thursday night and it has of course, soured me on the school and put my daughter into a tailspin. Hate this process! As there is a good chance we won’t qualify for aid, I would rather know sooner than later.
I never had a recruited athlete but your description in #9 sounds, frankly, unethical on the part of the school. I’d be soured also. Are you sure that’s the situation?
@twoinanddone can you read post 9 and comment
@19and21 explained a little more in another thread, but yes, schools can absolutely limit (or prohibit) need based FA to recruited athletes. In many situations, any need based FA granted by the institution has to be included in the totals that the team has and coaches don’t want to deal with that accounting, so they just say that if you want to be a recruited athlete, you will not be considered for institutional FA. If you want need based FA, you won’t be a recruited athlete (but could be a walk if that school/coach allows walk ons). Some schools make students pick between athletic aid and merit aid after being accepted too. They don’t have to by NCAA rule, but the school only wants to give one type of aid - athletic, need, or merit.
The accounting and reporting can become complicated and coaches don’t want to be investigated for recruiting violations. If recruited athletes with financial need could just be given need based aid, then the coaches could ‘save’ the athletic scholarships for wealthier students, and a team that was limited to 10 scholarships could really have 20 students on full scholarships, with 10 receiving athletic scholarships and 10 receiving need based aid.
Students have to make application decisions all the time. SCEA at this school means you can’t apply ED at that school. Applying ED means you can’t compare financial aid packages. A legacy who wants a boost has to apply ED. @19and21 has to decide if the student wants to apply ED (assume higher acceptance rate) and give up FA or take the risk of applying RD but perhaps getting FA.
I feel like this is the dirty little secret of athletic recruiting. My daughter was mainly looking at need blind D3 schools where there is only coach support, or no support and I never thought simply applying for aid would hurt her application. Someone from financial aid is supposed to be calling me in the next day so I am hopeful I can get a sense of whether we will qualify for aid.
Wow. I never knew that. So does this mean only students from affluent families willing to pay full freight can be recruited athletes?
It’s really not a secret. My daughter did not receive need based FA from her school. She did receive athletic aid, merit aid and need based aid from state and federal sources (so we would have qualified for FA from the school too) but the athletic director had the policy of ‘no need based aid for athletes’ and that’s how he managed his programs. I think that was better than saying ‘the track team recruits can accept need based aid but the golf team cannot.’
Schools have many different ways of setting up aid and allowing the stacking of athletic, talent, merit, and need based aid. Many schools don’t allow stacking aid at all, even for non-athletes, so take the music scholarship or the merit scholarship, but you can’t have both. Schools do what they have to to make their programs work. In athletics, it can also be a conference thing like the Ivies don’t give athletic scholarships. The Patriot league has rules for athletic and other aid and I think most schools and most sports don’t allow stacking.
@DadTwoGirls Just to balance this out, I am a divorced small business owner who can’t easily pay $75K, and I managed to put both my kids through private schools.
OP, when filling out NPCs, I did assume a large amount of my business expenses would get added back in. And you want financial safeties you know you can afford on the list, too. (But even mist of my kids’ financial safeties were privates — we focused on schools giving merit for those).
I guess since my kids both went to schools where there are no athletic scholarships (one DIII, one Ivy) it just seems wrong for a recruited athlete not to be able to receive need-based aid. (Both schools are also need-blind, meet full-need…) Things you learn…
What I am most upset about was that it wasn’t brought up until last week-- when it is nearly too late to ED to a D3 school with a November 1st deadline. Also, she gave up so many other activities in order to practice 15 hours a week that her application will look weaker in the regular ED applicant pool (though it will be “flagged” by the coach). Lesson learned, should have asked that question months ago.
That’s the rule for most D1 schools. The Ivies are the exception. D3 doesn’t have athletic scholarships, but the need based ones to athletes have to be given under the same qualifications as to non-athletes. You can’t have a Trump or Kennedy who JUST HAPPENS to be a good tennis player getting the need based financial aid John Doe gets. There are D3 school that have been investigated for giving need based aid to hockey players who did not seem to have the same need as other students at the school
If the school is limited to 10 scholarships in a sport, and the school can also give need based aid and merit aid (and the school has unlimited funds like some Ivies and some D3), then there really isn’t a limit on the number of athletic scholarships, is there?