<p>As a parent getting ready for FAFSA next year, I have a question aroung how to declare assets that are not quite concrete - for example I have stock in my private company that are potentialy worth quite a bit, but this is speculative and including their value would likely exclude me from financial consideration. Conversely, from a liquidity and annual income standpoint, I would likely qualify for at least partial assitance. The stock is not visible and reported on any tax returns. </p>
<p>Does anyone have experience they can share about determining asset value for private stock like this? </p>
<p>If you know what percent of stock you own and the net assets of the business then you could use that as a minimum. Valuing private equity interests are difficult but I would definitely inlcude it with some estimate of value.</p>
<p>If the stock has some contingency or has not vested yet then perhaps you are ok in not discolosing.</p>
<p>If your family owns and controls more than 50% of the business and it has less than 100 employees, the value of the company is not reported on FAFSA.</p>
<p>While the value of that business is not reported on the FAFSA, it WILL be on the Profile if that is required for your school. And those Profile schools will expect to see the value of your business. And if they even think you have “hidden” assets someplace, they will question you.</p>
<p>Also, FAFSA only schools would only guarantee you a Direct Loan of $5500, and a Pell grant…but for the Pell, you would have to be LOW income. </p>
<p>What kind of aid do you think you will receive from a FAFSA only school?</p>
<p>Thumper is correct, the catch 22 is that for FAFSA only schools any aid is likely to be federal direct loans and any merit money the student can qualify for regardless of this business or stock valuation. For the Profile colleges consideration is given to many things not reported on the FAFSA. In the OP’s situation much will be determined by where the student is applying and what percentage of the business/number of employees.</p>
<p>Everything can be valued. A problem with liquidity will decrease value, but not eliminate it. Considering the potential you cite, what would a savvy investor pay you for that stock today–or for the right to have that stock once any transfer restrictions lapse? What would you pay for it? There’s your value, and while it may be low, I strongly suspect it’s not zero.</p>
<p>Interesting responses from all of you, thanks very much. I am primarily looking at private Universities, and all seem to use FAFSA as their starting point - and cost over 50k per yr. The asset situation i am referring to is where i am a small shareholder in a relatively large privately held consulting company. the actual assets of hte comapy is low - we are intellctual. In one sense I could make the value of the stock equal to the amount i have paid in as principle…with any growth on that being speculative until i cash it out. At current paper valuation, my share holdings are worth over $1M - but this is paper value and could vanish as we all know. In reality, for all anyone knows, i am an employee with a salary and there is no public record showing my stock</p>
<p>I still am not sure where to go with this…as one of you pointed out, there is some value in my company stocks (ie it is not zero) and on the other hand i dont have my hands on it </p>
<p>From mock calculations ,even if my net worth is in the range of 500k, my expected contribution comes out in the range of 50k…is it even worth applying for the aid and worring about all of this?</p>
<p>If you are looking at private schools the FAFSA declaration won’t be your big hurdle. It will be the CSS Profile or individual school’s review of assets. Your FAFSA assets probably won’t make a difference.</p>