Are there any schools that weigh income more heavily than assets in terms of financial aid?
I ran through Harvards net price calculator and was surprised to find that I had to pay 50k+ out of pocket despite my family’s lower middle class income.
It’s mainly because of my dads 401k which he withdrew which kind of screws me over.
Are there schools that would look at my family’s income (70k ish) and sort of not weigh the assets as heavily?
Also, when filling out the financial aid forms, is it the data my family used for this year’s tax report (April 2015)?
We found the amount of FA the kids received varied wildly. In addition to FAFSA you will most likely need to fill out CSS Profile for some of your schools AND school-specific financial aid forms for a few. Whether or not you still have a mortgage, own a second home, have retirement savings, etc. all come into play differently. Will you have any siblings in college at the same time? We found that was a big factor (and helped a lot!) You will need to document this though and show how much aid your brother/sister is getting. The best approach may be for you to identify some safety / match schools that have good MERIT aid. Meet all the deadlines (often by Dec. 1). Write any extra essays and cross your fingers. Depending on your SAT / ACT scores, there are some schools that will give you automatic merit, too. Good luck.
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Are there any schools that weigh income more heavily than assets in terms of financial aid?
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That withdrawal isn’t “an asset”, it’s income.
Where is the money now? if it’s sitting in savings, then it’s getting counted as income AND as an asset…a double whammy.
You’re going to need a strategy because of this situation:
Apply to your schools, and if accepted, ask if they’ll exclude that withdrawal. The schools may refuse to ignore the withdrawal, but you can try. If the money is sitting in savings/investments, then they won’t ignore that.
Also apply to a few schools that FOR SURE will give you HUGE merit. These will be your back-ups in case the other schools won’t adjust for that withdrawal. When I say “huge merit”, I mean HUGE…like MORE than full tuition. You’d need net costs after merit to be affordable.
So he basically earns 75k a year in salary, and from each house we collect about 3000
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My family owns 2 homes but they are both not paid off. We rent a third house that is not ours and basically only keep up with the mortgage our 2 houses by renting them out to others.
I don’t know exactly the worth of our houses, probably not a lot as one of the houses is near Detroit
3000$ rent per month each for both houses so a total of 6000$ per month. We basically break even on both of the houses.
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Ok…your story isn’t adding up. You’re saying that your dad has a salary of $75k, plus your family takes in $6000 a month in rent from 2 rental properties. (plus, you say that one home may not be worth much because it’s near Detroit…BUT, the rent is $3k per month??? lol…sorry, but property that takes in $3k per month rent is not exactly The Projects.)
Is your dad taking time off from his position as a prof at a top university to do research? If so, will he be returning to work at some point?
This story didn’t add up in the OP’s other thread about financial aid and the ivies.
The dad earns $75,000 a year. PLUS the family gets $6000 a month in rental,income. PLUS, the equity in the rental properties could be considered as well.
And I’m checking for clarity…the OP is now saying that in addition, the father made a retirement withdrawal as well?
To the OP…for you…whatever happened during the 2015 tax year will be what you put on your financial aid application forms for the 2016-2017 school year.
So…when was that retirement withdrawal? 2014 or 2015? Where is that money right now?
Does your mom work or plan to work during 2015? What about your dad?
Did your dad have a tuition payment benefit for kids at his job as a professor? Is he on sabbatical and will you qualify for,this…or,did he quit the job?
OP, if you want any kind of accuracy to answers (rather than just what you want to hear/read) then you need to put in all the details. Posters are asking the questions so they can fully understand your situation and not be wrong in responding.
Home State: California
Stats: Didn’t qualify for NMSF, 2320 SAT, 3.94 UW GPA, 4.25 UC, 4.16 Weighted GPA
As for the withdrawal it was 500k in 401k so yeah. The money did go towards buying a home.
The rent part, I asked my dad and it turns out ALL his income, plus all the rent minus all the costs is 75k, don’t ask why, I just asked him and that’s what he put on his tax form.
My dad is not a professor in the states.
My mom does not plan on working.
The withdrawal was during 2014 so it was reported on the tax report of 2015.
Any other info, I can add if you need it.
Basically we earn two homes, my dads income (including all the ret and costs) at least what he said he put on the tax report is 75k.
Our assets is kind of the biggest problem because we own 2 homes and he withdrew the 401k thing in 2014 as an asset.
Sorry about the late reply, I’m in China which is a 15 hour time gap between the U.S.
EDIT: 401k withdrawal did not go towards a home, it’s in investments (or in his stocks) right now.
Sorry if I’m being vague, I have no idea about this kind of stuff, I’m asking my dad as we go here.
Some schools go back 2 years on the taxes for parents, most only one, so 2014 may not be considered. However, for 2015, you now have $500k in investments and ‘stuff’ and if it is not a qualified retirement plan, then the school may count it against you.
We have no way of knowing how any school will view this, but it sounds like you have a lot of assets and may be expected to pay a lot of your costs of college.
A $500,000 addition to either income or assets is going to have a large impact on your need based aid award.
Are you hoping that a school will award you need based aid so that your parents can invest their money in stocks…or something? If so, please understand, college need based aid is for funding college educations, not for funding family investing.
Your parents could have easily taken part of that $500,000 withdrawal and used it to fund your college costs.
Don’t subtract the costs. Are you saying that your parents had no income beside the $6000 a month in rental income? Sorry, but you earlier said your parent had $75,000 in earned income…plus the rents. Does your parent have a job in addition to the rental income? What does he earn at his job??
If the money was withdrawn in 2014 from the 401k account, it would have been reported on your 2014 tax return which was due by April 2015…but this is NOT your 2015 tax return.
Still…investments are counted as assets. If this money is in an account, it would still be considered an asset…NOW. $500,000 in assets would add about $23,000 to your EFC per fafsa. If you have a $75,000 income, your EFC would be in the $20,000 or more range, most likely. Plus you also have the equity in those rental properties.
So you would have about $23,000 plus $20,000 plus whatever 5.6% of the equity is in your rental properties.
It is very possible that your FAFSA EFC could well exceed the cost of attendance at many schools.
@Madison85 Well we can’t withdraw any of the money in our investment account without huge amounts of penalties and taxes and we actually lose money on the rental properties as we have not paid off our mortgage. So basically we have very little actual usable money. All the money is kind of stuck there.
@thumper1 That’s what my parents put for their income on the tax report.
Isn’t that income what the colleges use to calculate financial aid?
Also, the 500k was not withdrawn FROM the 401k account, it was withdrawn TO. This means that the money is stuck there and can only be used for investing.
Sorry what I said earlier, I asked my dad later and that’s what he said. He said his reported income was 75k a year, and I asked if it included the money we got from rent and he said yes.
Also, maybe I worded it poorly, but the 500k my parent withdrew is stuck there in his account (401k I think). In order to withdraw it, there are huge penalties, taxes, fees etc. so if he withdrew, he said he would basically have nothing left.
I’m not sure what he earns at his job. All I know is that on the tax form, he said his income was 75k which included everything.
Also, just ignore what I said earlier on the other thread. I had not consulted my parents then and had very little idea about my family’s actual circumstance.
Basically I’m gonna give another rundown to avoid further confusion.
My family’s circumstance right now:
Owns 2 homes (rented out).
Reported income is 75k a year (don’t know if this counts the money from the rental properties)
500k in an investment account (that was not taxed when withdrawn so it should count as an asset, and is stuck in an investment account, withdrawing it would result in huge fees, taxes and penalties so if my parents withdrew the 500k today, they said they would receive almost nothing)
I was wondering if there were any colleges that would be a good financial fit for me, because I don’t think we can pay as much as some people think we can. We barely make even with our rental properties (so our net income is basically 0 for real estate) and the 500k is stuck in investments and can’t be withdrawn so my family has very little actual money that they can use for my college education.
I did not qualify for National Merit Semi-Finalist.
My stats: 2320 SAT, 3.9~ UW, 4.1~ W. Home state: California
@Madison85 Harvard would only want 20k~ without the 500k thing.
I am a rising senior. I was wondering, for college financial aid, how recent of your financial situation do they look at?
So for example: If something major happens to my family financially in September, would that count?
If it happened in October would that count towards my financial aid? Like is there a specific deadline/date? I want to know the dates for both Early and Regular decision. Hope you guys understand what I mean.
Thanks a lot. I know that there are a lot of questions and I’ll be happy to answer them all. It’s basically because my dad freaked out when I told him assets were a major factor in college financial aid. He thought that I would qualify for a lot of financial aid bc of his low income but apparently not. So yeah kind of my fault for not researching the financial aid policy earlier.