<p>I'm kind of confused. My dad just told me I'm probably going to be getting a lot of financial aid for my first year of college. He told me on paper, my family is $500,000 in the red. He said I would get at least $5,000 in financial aid. Is that possible?</p>
<p>Has he done a FAFSA calculator?</p>
<p>[FinAid</a> | Calculators | QuickEFC](<a href=“http://www.finaid.org/calculators/quickefc.phtml]FinAid”>http://www.finaid.org/calculators/quickefc.phtml)</p>
<p>If he hasn’t, you might want to. This will give you an idea of what your expected family contribution might be.</p>
<p>As far as financial aid, that is dependent on where you apply to college. Some schools give a lot of aid, some don’t. You can look up individual schools here:</p>
<p>[::</a> College Planning Made Easy | Inside Source for College Admissions Requirements](<a href=“College Board - SAT, AP, College Search and Admission Tools”>http://www.collegeboard.com/)</p>
<p>Search for the school, click “costs and financial aid” and you will see something like this:</p>
<p>[College</a> Search - Colgate University - Cost & Financial Aid](<a href=“College Search - BigFuture | College Board”>College Search - BigFuture | College Board)</p>
<p>[College</a> Search - New York University - Cost & Financial Aid](<a href=“College Search - BigFuture | College Board”>College Search - BigFuture | College Board)</p>
<p>Scroll down and look for:
Average percent of need met: </p>
<p>The closer to 100%, the better packages that school tends to give.</p>
<p>Good luck!</p>
<p>debt isn’t really considered in the fafsa. I would use <a href=“http://www.fafsa4caster.ed.gov/[/url]”>www.fafsa4caster.ed.gov/</a> and not the finaid.com website. Their data is out of date. Run the Federal and institutional methods to get an idea of your efc. I don’t think anywhere asks about debt (other than possibly the institutional method asking about home equity)</p>
<p>How do you get 500K in debt unless you owe more on a mortgage than the house is worth?</p>
<p>Fafsa federal method doesn’t care about that. Most of EFC is based on INCOME, with assets being the other (lesser) part</p>
<p>Even if you owe more than your mortgage…the FAFSA won’t give two hoots. Your primary residence isn’t even mentioned on that…and no other debt is either. For the Profile, all it will mean is that you have no equity in your home. </p>
<p>The reality is that financial aid is largely based on INCOME and assets (money in the bank). Your debt is not really a factor.</p>
<p>As the above have stated…debt isn’t a factor… Debt is considered to be a “lifestyle choice”.</p>
<p>Your F/A (if you qualify) will be based on your parents’ income and assets. If their income is rather strong, your F/A may only or mostly be student loans; if it’s high, you may get nothing. Your dad may be under the impression that F/A is free money (like grants), but “free money” is usually for lowish incomes unless you’re going to an ivy or similar school.</p>
<p>It sounds like your dad can’t /won’t pay much for your college. If your family’s EFC is higher than what he’ll pay, then you’ll have to find other ways to pay for college.</p>
<p>You may have to look for merit scholarships. </p>
<p>What are your stats?</p>
<p>How much can your family give you each year for college?</p>
<p>I honestly don’t know anything about my dad’s businesses. So he told me because of tax write-offs, he’s 500k in the red. But it’s not like I’m being forced out of my house and stuff. He has a variety of businesses probably worth $10-12mill. I’m really lost when it comes to money stuff.</p>
<p>Unfortunately, my stats aren’t great: UC gpa 3.4 27 act. I’m applying to uc’s and csu’s.</p>
<p>It sounds like your dad is talking about some liabilities vs. assets situation. If his assets are devalued for whatever reason, it just means there might not be assets to factor into your EFC. But like others have said, income is the main thing. His income will be taken from his federal tax return. It’s pretty normal to have to submit copies of tax documents to the college as part of a verification process. I would think with the complexity of your dad’s finances it would be a near certainty that you will have to.</p>
<p>With businesses worth 10-12 million dollars, you should probably expect close scrutiny, and perhaps no financial aid regardless of your dad’s optimism. You’ll just have to file and see.</p>
<p>Cool, thanks.</p>
<p>Plus, my aunt is a CPA that comes over often to see my dad to go over papers so I can tell it gets pretty complicated.lol.</p>
<p>It’s unlikely you’d get a cent from a UC or CSU.</p>
<p>Could his dad have been talking about unsubsidized Stafford loans?</p>
<p>Why is anybody with businesses worth $10-12 million dollars thinking that their kid will get Financial Aid?</p>
<p>Anyone who files a FAFSA is authorized an unsubsidized Stafford of approx $5K.</p>
<p>^^^</p>
<p>I guess I’m one of those people who doesn’t think getting $5k in unsubsidized student loans is getting F/A.</p>
<p>It’s probably worth 7-10 now.</p>
<p>I got a peek at the tax return crap and I saw the income <530,540> which the <> means negative.</p>
<p>On the FAFSA there is a question about property you own. They say to <em>not</em> include your primary home, but if you have a second home then the value of that home is considered to be, in some part at least, an asset available to help pay for your college costs.</p>
<p>I think the issue for you will be how much, if any, of your father’s high value business assets will but considered in that way.</p>
<p>Obviously, you’ll just have to file and see how it works out. I think yours is a pretty specific and complicated case. In any case no matter how it falls out, it sounds like you won’t be faced with not going to college at all because you can’t pay for it… so consider yourself a fortunate kid.</p>
<p>^^^</p>
<p>If a person owns companies, aren’t those considered to be “assets”? Not to mention whatever other investments or holdings the parents have.</p>
<p>I don’t think it’s going to be believable that your family had no income last year.</p>
<p>And, just because of some fancy footwork with accounting a company can declare a loss in a particular year, it doesn’t mean that every year this could be done while in college. Again, it would be unbelievable that your family had no income, year after year.</p>
<p>A small business with 100 or fewer full-time equivalent employees that is owned and controlled by the family (more than 50% of the voting rights must be owned by the family) is excluded as an asset from FAFSA.</p>
<p>^^^^</p>
<p>Just another example of how FAFSA is so screwed up. </p>
<p>The thought that someone can own several businesses worth millions, and then cleverly cook the books to appear to have no income, and FAFSA won’t count the businesses as assets suggests to me that FAFSA has its head up its ass-ets.</p>
<p>Yeah, when you have no income or insufficient income to support yourself or a family, they do put that application through the verification process. Every year there are at least several students here on CC that go through this. They’ll want to know what you’re living on.</p>
<p>I believe what the poster is talking about it a figure arrrived at in an income statement generated by his father’s business. Income statements can end up with negative numbers because of expenses, asset depreciation, investment losses and so forth. Maybe the student still gets financial aid under the OP’s circumstances, but I think it’s unlikely. Even if he does, federal financial aid is very limited. It’s not like getting a free ride to school.</p>
<p>What his father is modeling for him in terms of moral behavior is the real tragedy here.</p>
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<p>I think this is a pretty big leap. What the dad said is that his business has a $10-$12 million valuation and is deeply in the red. He also said the child could get $5000 in financial aid. As Erin’s Dad pointed out, anyone who files a FAFSA is authorized an unsubsidized Stafford of approx $5K. Where is the moral tragedy here? The valuation of a business may or may not have anything to do with current earnings. It’s possible that the valuation comes entirely from the depreciated cost of capital equipment - which might have been purchased at 10 times that cost before the economy tanked. </p>
<p>Like many questions that come up on this board, there’s a rush to judgment based on only the sketchiest details of a family’s financial situation. Let’s focus on what might be helpful to the confused kids and parents who post questions here and less on criticism.</p>
<p>It’s been useful to me to think of the FAFSA form as a set of questions designed not to screw savers/responsible parents/the middle class/the upper class, but to think of it as a not-well-thought-out query of parents’ finances designed to minimally prevent fraud in the financial aid application process.</p>