My S17 would really like to go to Northeastern University. I know applying ED is his best shot but for us its just too much of of a risk financially. From the numbers I got doing the net price calculator we can afford it but what if it is completely wrong? Are those calculators really that accurate?
Chatter on these forums suggests that they are largely accurate for “ordinary” family finances, meaning married parents (or widowed single parent), mainly W-2 income, no unusual assets, no self-employment, small business, or rental income, but many of them can be less accurate for divorced parents (at colleges that want both parents in the divorced case, including Northeastern), unusual or high assets, self-employment, small business, or rental income.
Is either parent self employed? Do you own a business? Do you own real estate in addition to your primary residence? Are the bio parents divorced/remarried?
For us Northeastern was way more expensive than any other school that either daughter got into except for BU (which was just as bad). There is no way that it was worth the cost. However, the NPC had predicted this and was accurate.
I think that the two posts above have correctly named the situations in which the NPC becomes inaccurate.
Is either parent self employed? Yes
Do you own a business? Yes
Do you own real estate in addition to your primary residence? Yes the business property
Are the bio parents divorced/remarried? No
Because you own a business, are self employed, and own additional real estate, the net price calculators are likely NOT going to be accurate…at all.
Most NPCs just don’t ask enough questions to be accurate in these situations. In addition, the NPC has no way to know your business or secondary real estate deductions which can be allowed for IRS tax purposes…but NOT for financial aid purposes and get added back in as income.
“Is either parent self employed? Yes”
“Do you own a business? Yes”
Then the NPCs are likely to be wildly inaccurate, and financial aid might be quite bleak. Nearly everyone I know in the US who has a small business, owns a farm, or is self employed had to go to in-state public universities. The exceptions are a few people for whom $300,000 is pretty much nothing. In Canada this is very different (I know many farmers in Canada who sent their kids to top schools).
Personally I would avoid ED, and definitely plan to apply to some affordable options.
In the self-employment, small business, or real estate income situations, some colleges disallow some deductions, so that “income” may be closer to gross revenue for those colleges’ financial aid calculations than it is for income tax calculations.
You may want to do “worst case” NPC runs for all colleges using revenue instead of income, in addition to NPC runs using income, so that you can estimate the range of results that you may get.
Hmmmm good to know. I did put in all the required tax info including business worth. It did not ask about the business real estate. It asked if we own real estate other than a business which we don’t.
If you or your kids have any trusts, that is another area where the NPC will likely be inaccurate.
No we don’t have any trusts.
Colleges that use the Profile to evaluate FA requests are often very tough on the self employed when the time comes to actually awarding FA.
If I were you I would NOT let your DD apply ED.
We have seen too many cases where the NPC’s are way off for self employed.
Thumper is the “FA guru” on CC- I’d listen to what she has to say.
You wrote this. So do,you own property in addition to your primary residence…or not.
I will add…does your self employment income fluctuate? This is also an issue in terms of college costs. At most places…you will be applying annually.
It sounds like finances are a concern for you. That being the case…I would suggest NOT applying ED. So what if it gives an admissions edge of some sort…if it’s not affordable it’s like getting rejected…only worse.
Cast a broad net. Look for schools where merit aid potential is there. That won’t be affected by your income. Look for affordable instate options.
Look at what you CAN pay annually. That is FAR more I oortant than any number churned out by the NPCs. Discuss finances with you kid before she applies to colleges. Let her know what you CAN and WILL pay. Sure, she can apply broadly…but I think you should make it clear what your max net cost can be. If schools don’t give sufficient funds to meet that…they may need to be off the table.
But tell your kid that BEFORE she applies.
It’s heartbreaking when a kid applies, gets accepted…and after all that, the family says “not affordable”.
Have that conversation before applications are sent.
thumper1…
This is exactly what I am trying to do. Use the NPC to see which school would be affordable but now you are all saying it won’t be accurate because of our self employment. Our finances do fluctuate but not by much and unfortunately our business isn’t doing that great which puts us in the low income category. We do own real estate in addition to our primary residence but the NPC asks if we own property other than a business or farm which would be no.
And you are now seeing one of the flaws in that NPC. You DO own property in addition to your primary residence.
You will be required to submit your business supplement…and those owning farms submit their forms. Those are NOT typically reflected on the NPC…but they are part of the CSS Profile which Northeastern uses.
There have been plenty of farm and business owners on this forum who have not qualified for need based aid.
Honestly…ED with tentative finances is very risky. You have no potential to compare net costs amongst a variety of good schools.
I am self-employed and my kids did get good need-based aid – but as others have noted it was not at easily predictable and need-based awards were quite variable, even among schools that claimed to meet 100% of need.
So no, ED is not a good idea —not only because the NPC could be inaccurate, but also because it simply prevents you from having the opportunity to compare awards. I think it might be particularly difficult for a self-employed business owner because we have a someone more fluid sense of what is affordable, as many of us are used to juggling expenses between times when cash flow is good and time when it is not so good. If you have a job with a salary of $75K per year, you know exactly how much money you have coming in each month, you know your expenses – so you can budget. If you have a business that on average nets $75K but could be $25K in a bad year and $125 in a good year… and you are looking at a FAFSA based on tax returns from two years prior – then it can be very hard to look at an ED admission in December and figure out whether the financial aid is good enough.
Maybe you are thinking you can manage $25K a year for college and here’s an award that requires you to pay $35K - but the COA for the school is $70K so either way it’s a substantial discount… what do you do? Latch on to that $35K offer and hope for the best? Or pass on it and maybe end up in the spring with no option that’s much better, and then have a child who gave up their top choice college in the hopes of other options that never materialized?
So I say pass on the whole ED thing – just tell your kid that because of your financial situation you need him to cast a wider net and also include some financial safeties (schools where you could either afford full pay or where you are absolutely assured of specific merit money - such as a school that will promise a full tuition scholarship based on SAT or ACT scores).
(schools where you could either afford full pay or where you are absolutely assured of specific merit money - such as a school that will promise a full tuition scholarship based on SAT or ACT scores).
such as the schools listed on post #57 of this thread
http://talk.qa.collegeconfidential.com/financial-aid-scholarships/2006094-2017-automatic-full-tuition-full-ride-scholarships-p4.html
Hmmm… I’m not sure why this would be an issue, as long as the trust assets can be determined and are added to all the other reportable assets.
Thanks everyone…yes I agree ED is NOT a good idea for us. Especially with a business that fluctuates so much and lately it hasn’t been great.
Even if you don’t do ED, have your child consider EA or rolling admissions schools. It is SO nice to have one early acceptance to know ‘hey, I’m going to college!’