<p>Does Duke looks at CSS info for FA.</p>
<p>If a parent have a single Family Home which is underwater or NO equity after considering first and second mortgage on the home loan then how DUKE consider that. We have a AGI of 103k before Taxes, but big Debt to payoff mortgage and CC/Auto loans. will Duke consider these when awarding FA on need based and even Merit…</p>
<p>One more thing on NPC, how Duke consider Itemized Deductions (line 29 on Itemized Deduction form). ??</p>
<p>MY NPC is coming around 23K which I think is quiet high.</p>
<p>Few if any schools will give more aid to families based on their debt, including underwater mortgages with a scarce, few exceptions. One I have heard mentioned is excessive medical bills, but I assume you would need tens of thousands of dollars of debt and copious documentation.</p>
<p>If you have signficant illiquid assets, such as a million dollar retirement account or a successful business, I suppose an underwater mortgage might be used to offset some of this but this is an awfully rare circumstance.</p>
<p>Every FA officer I have spoken with has told me that they do not factor credit card or car loan debt into FA calculations, regardless of how the debt was incurred. They also, as a general rule, do not consider itemized deductions and only look at pre-tax income. In fact, they typically add 401k contributions and other “above the line” deductions back to pre-tax income as their starting point. How much you spend on mortgage interest, charitable deductions and other deductions are considered to be voluntary consumption choices that do not affect FA.</p>
<p>Again, these are standard practices across most private universities are not unique to Duke.</p>
<p>Thanks rmldad for your valuable insight into FA.</p>
<p>I agree that Debt, mortgages will not play into FA.
I was just curious why CSS form ask for Itemized Deductions which can be a big chunk of your AGI… some of the Schools EFC calculators also ask for that number… If they not using it they should not ask for it…</p>
<p>What confuses me is that my family owns a second home (half of it) and when I add that to the FA calculator my package drops to only about 8,000. I was curious so I put that we had one home worth the same amount as our two combined. The gift was significantly higher. Could this be right? My parents make 115k a year. How could they be expected to still pay 52k with this income?</p>
<p>^They see a second home as a usable (and able to be liquidated) asset. They don’t view a primary residence that way since they don’t expect you to sell where you live to pay for college…so, yeah, it could make a significant difference. It’s probably saying house 2 value = same situation as if they had that amount in cash in their checking account. Even though one is obviously much more liquid than the other…</p>
<p>@10bio10 - Yours is a perfect example of how families need to understand the FA process and calculations - as well as how ridiculously complicated they are. Your family’s lack of knowledge will potentially cost tens of thousands of dollars.</p>
<p>If we assume (making numbers up) your family has $200k equity in your primary residence, which has a market value of $300k, then the mortgage would be $100K. Let’s suppose the family’s equity in the second home is $50k. As it currently stands, the $200k primary residence equity falls under Duke’s primary residence allowance and is not counted in the FA calculations. However, the $50K is considered a usuable asset (as bluedog points out) and thus 12% of its value ($6k per year) will be included in the caculations.</p>
<p>Using these assumptions, it would have been best for your family act prior to January of your Junior year of high school. You could have used an equity loan to pull all the money out of the second home and applied it to the primary residence mortgage (or locked it up in retirement accounts). You would now have $250k equity in the primary residence (or a larger retirement account), which would still likely be within the allowance and excluded from FA numbers. However, the equity in the second home would now be $0 and the usuable asset would have disappeared for FA purposes.</p>
<p>Duke’s philosophy is consistent with the prevailing standards among highly selective universities, so this applies equally to other schools with similarly generous policies.</p>
<p>The good news is that if you act before December 31, the changes could take effect starting in your sophmore year, depending on how your college treats changes in financial positions.</p>
<p>By the way, none of this is illegal in any way. You can call an FA officer and discuss this information freely. It is simply a case of understanding their rules and applying them to your situation.</p>
<p>What type of deductions are added back into a business? What about supplies and materials? I’m completely new to this financial aid system, and being a first-gen doesn’t help my situation, either. My parents own a construction business, so is our final income going to include raw materials/equipment?</p>