Hello, I’m currently a junior and my parents are self employed. I bring this up because they do not make a yearly salary, and instead they make money depending on how much houses they sell (my dads a carpenter, my mom’s a real estate agent). What I would like to know is how do schools like Stanford, which offers free tuition to people who’s parents make less than $100,000 a year, decide your financial need if your parents don’t make a yearly salary. While I don’t know exactly how much my parents made last year, I do know that they haven’t made much money after the 2008 recession (what with the nobody buying houses) until last year. They haven’t told me how much, but I do know that if it where another year, we would have qualified for this sort of financial aid, but this year we don’t. Will they look at more than just what we made in 2015, and is their an option to tell them this. I feel like only writing what you had made in the last year doesn’t accurately reflect your financial situation.
I ask this because someone with a salary would have been making roughly the same amount throughout that span of time, but my parents would have made significantly less than usual and didn’t have a good year until last year. I am by no means expecting to get my full tuition paid, after all my parents financial future looks pretty bright, but I would like to know if I could still qualify for some scholarships/financial aid.
Sorry if I sound very first world problems-ish, “oh poor me, my parents make too much money for me to receive financial aid” thank you!
Your parents fill out a tax return just like everyone else. They need to declare the income they earn on that tax form. Even the self employed fill,out returns and post their incomes.
Your parents filed a tax return for 2015, or will do,so by October (some folks who are self employed file for extensions). The information on that tax return will determine your eligibility for need based aid, along with any assets your family might have.
And your assumption that salaried folks might make the same income isn’t accurate either. People change jobs, get jobs, lost jobs, get raises, etc. there are plenty of posters here annually who say that their family incime is finally higher but was not so for many years prior to applying for need based aid.
It is what it is. The 2017-2018 school year FAFSA and Profile forms will use 2015 tax return information.
They will look at all non retirement assets (so will not count IRAs, 401ks) and equity in houses (not all look at equity). All that PLUS income is looked at as $$$$$ for college. If you have more than one sibling in college that’s a consideration as well.
Does your family own real estate other than your primary residence?
In addition, some private Colleges will add back in some of the but sines deductions allowed by the IRS for,the self employed…or those who take business expenses.
Yes, they will consider current assets (except for qualified retirement accounts, and in the case of FAFSA primary home equity) as well as income for the reportable year. If your parents’ income was below normal for the several years prior to 2015, they may have depleted some of their assets to make up for it. Lower assets will mean better need-based financial aid.
Lower assets MIGHT mean increased need based aid. This really will only be a sure thing at the competitive colleges that guarantee to meet full need for all.
The formulas for computing need based aid are very heavily weighted towards use of income. Assets are a smaller amount…unless, of course, your family has huge assets.
So…even IF your assets have been depleted, if your income is high enough during the tax year used for your FAFSA and Profile, your aid will be based on that income primarily.
For the 2016-2017 and 2017-2018 school years, you income from the 2015 tax year will be used.
Your assets will be reported as of the day of your filing of the financial aid forms.
For the 2016-2017 and 2017-2018 FAFSA forms, your 2015 income information is what is included. No other years.
However, the Profile does ask you to estimate what your income will be for,the following year, I believe.
And some schools will ask for the previous year income information be sent to them.
Profile asks for base year income and tax information, income and tax information for the year previous to base year, and income and basic tax estimates for the year after base year.
If assets are considered as part of a need-based aid calculation, it is highly likely that lower assets will mean better need-based aid. Maybe not much better, but of course it all depends what kind of formula is used.
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, and instead they make money depending on how much houses they sell (my dads a carpenter, my mom’s a real estate agent).
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Be aware that schools that use CSS Profile often “add back in” certain deductions that self-employed people take.
A couple of years ago, a dad posted that his DD applied ED to Columbia and got in. But mom was a realtor with many deductions…and Columbia added them all back it.