<p>I'm a rising Senior. I have hopes of attending either GWU or NYU next fall. My parents are worried about it because it will be a $250,000 education. The problem is paying for it. Most people that look like they can afford it on paper, can. and most people that can't get aid. But we are a mix. On paper, my dad looks like he is making upwards of $300,000 a year. Problem is that what we have no way of showing that a large sum of that money is going back to his business which he took the loan out with. after loan payments we are back under 100,000 a year income. Since the loan is with is business and business partner, there is no bank to backup that we are paying of loans. To make it worse, next summer we will be buying into the business even more, putting us another half a million in dept, again with no bank involved. When it comes time to submit for financial aid, colleges are going to see easily north of a million dollars in assets, with at least a $300,000 annual income, and no proof of any dept what so ever! </p>
<p>Does anyone have any advice about what to do in my situation? I really want to apply ED but because of my situation, my parents want to weigh aid packages making ED irrelevant!</p>
<p>If you need financial aid it will be difficult for you to apply ED. Some colleges will give an “early read” on financial aid which might help your family understand how their finances will be viewed or you can try some of the financial aid calculators. You would be smart to have a very focused list of colleges that will be more likely to give you some merit aid regardless of your family finances. This sounds cold but your family is investing in a business and choosing to invest in a business (as opposed to financing your college) which might be a good retirement strategy for them so I will not pass judgement but you’re going to have to balance your parents desires and your desires. You may not be able to achieve both.</p>
<p>Unless your parents are willing and able to write a check for the total cost of attendance, do not apply ED.</p>
<p>Individual colleges MAY give some consideration to your family’s unique circumstances when coming up with FA packages. Write a letter giving the details, backed up with as much detail and evidence you can muster. The only way to know for sure whether it will work is to wait for the FA packages to arrive and compare them. That leaves ED out of the picture.</p>
<p>We’re in a similar situation. Our accountant has already agreed to write a detailed letter explaining our circumstances. Whether it will be successful or not, only time will tell. But in the meantime, we have financial safety schools lined up, colleges that we know we can afford even if we get no need-based FA. I would strongly suggest you do the same.</p>
<p>Your situation is not “unorthodox” at all. There are thousands of college applicants every year who have parents who own businesses.</p>
<p>Yes I have some advice. Do NOT APPLY ED. GWU and NYU are both VERY expensive schools. Neither meets full need for accepted students…your family has a complicated financial picture with the business expenses. Your need based financial aid is very unpredictible…and you may need to look at OPTIONS when you are looking to pay the costs. If it looks like you have the money “on paper”, it’s likely NYU will expect your family to pay the costs. They don’t meet full need anyway so even if your income was lower it would not guarantee a nickel more of need based aid to you. I believe GWU uses the Profile in addition to the FAFSA. Your family’s business debits AND assets will be carefully scrutinzed by GWU. </p>
<p>I would suggest you apply regular decision…that way if the finances work for you…fine. You should create a broad list of schools with varying financial pictures…keeping within whatever budget your parents set for college costs.</p>
<p>I don’t think ED at NYU or GWU is a good idea for someone with your family’s complicated financial picture, probable business assets…and that you are hoping for need based aid. It just may not pan out.</p>
<p>This situation is not NEARLY as unusual as you would think. I think most people that look like they can afford it on paper, don’t think that they can, and most people that get aid, can’t get “enough”.</p>
<p>I will try to link a few similar threads and link them if they might be useful. I think the usual result is state schools and merit money.</p>
<p>Looks like you will get plenty of responses, but here’s one.</p>
<p>Similar idea
<a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/1176487-paying-private-universities-without-any-help-fafsa.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/1176487-paying-private-universities-without-any-help-fafsa.html</a></p>
<p>Don’t be glum, you are in a far, far better situation than kids from low income families. There are many things your family can do from restructuring debt to figuring out what they can afford. This is a very good position to be in, you just need to be smart about how you proceed and you need to work closely with your parents in the planning of your part of it (college applications).</p>
<p>Do not apply ED…</p>
<p>As for comparing financial packages…your family may need to face the fact that NO college is likely going to give you need-based aid…your income is too high. Self-employed people often face this problem.</p>
<p>You need to ask your parents how much they WILL pay each year. It sounds like whatever they WILL pay is a lot LESS than what they will be expected to pay.</p>
<p>**
The amount that your parents will pay will LARGELY determine where you should apply and where you’ll end up attending.**</p>
<p>You need a strategy…(that doesn’t include ED!)</p>
<p>1) Apply to a few top schools just to see what happens.</p>
<p>2) Apply to a few match schools that MIGHT give you good merit for your stats.</p>
<p>3) Apply to 2-3 financial safety schools…these are schools that you LIKE, you know you’ll get accepted to…AND…MOST importantly…you know for SURE that you have ALL costs covered thru LARGE ASSURED scholarships, small federal student loans, and/or family funds.</p>
<p>Besides recommending that you not apply ED to those schools for the reasons others have mentioned, I recommend that your parents get professional advice regarding the structuring and documentation of their business situation to minimize its effect on your eligibility for need-based aid.</p>
<p>My parents ARE willing to pay for whatever college i want to go to. I do have a deal with them where i will take out the loans for my first year. They will pay the other three. if i graduate w/ a decent gpa, they will pay off my loans. That is their insurance so that i work hard and not drop out after they forked out X amount of dollars for me. With that said, they are not wanting me to go ED because if i get into 2 or 3 schools that i love almost equally, they will want to go w/ the best price obviously.</p>
<p>I just thought i would clarify a little bit! I appreciate the advice a lot! I did not realize it was that common.</p>
<p>What are your numbers? GWU offers a lot of $20k scholarships, which cuts the price by a third. But concur with the others, don’t apply ED.</p>
<p>I am confused as to why a family earning either 100K a year or 300K a year would be eligible for need-based aid, unless they have like ten kids or something. The good news is that this is a family that invests and borrows, so the Parent Plus Loan program might be a good option, especially since the OP may not be able to borrow the full cost of his or her freshman year per the plan with parents.</p>
<p>Needy is a single parent family making 30K a year. Your family is not needy.</p>
<p>Remember it is not a one time $250,000 but spread over 4 years. One could argue that your family should put say $60,000 less every year into repaying the loan and use the money to pay for college.</p>
<p>Also, you cannot run a business without documentation, especially as you are talking about large sums of money. I am sure the business has records of monies paid and your fathers business accountant should be able to show the cash flows. You do not need a bank to tell that you have loan. IRS will insist that any loans to the business be documented and the interest rate be market rates. I would first suggest you talk with the accountant. There is no way that you are going to get much need based aid based on what you have said. I can appreciate your parents do not want to fork out much but as mom4college states, most colleges may not consider you needy.</p>
<p>“I do have a deal with them where i will take out the loans for my first year.”</p>
<p>Unless your parents are going to co-sign those loans, you probably aren’t going to get them. The only loans that you can qualify for on your own are the Stafford Loans, and the limits are $5,500 Freshman year, $6,500 Sophomore year, $7,500 Junior year, and $7,500 Senior year. This comes to a grand total of $27,000.</p>
<p>Have your parents run the financial aid calculators at [College</a> Admissions - SAT - University & College Search Tool](<a href=“http://www.collegeboard.org%5DCollege”>http://www.collegeboard.org) and [FinAid</a>! Financial Aid, College Scholarships and Student Loans](<a href=“http://www.finaid.org%5DFinAid”>http://www.finaid.org) to get a general notion of what they will be expected to contribute. Then, ask them to give you a solid budget to use as your bare-bones minimum in the case that you don’t get any aid at all anywhere. If they can come up with $15,000 each year, and you take out the maximum Stafford Loan each year in addition to holding down a full-time job each summer and a part-time job during the school year, it is likely that you will be able to afford your home-state public university, or an OOS public U that doesn’t charge extra for OOS students.</p>
<p>Again, thankyou for the continued advice! my parents will be cosigning my freshman loans and anything they dont cover will most likely come out of a college trust my grandparents have…(not enough for a full year but most likely 2/3 of a private school cost.) There is documentation but its complicated and im not sure how to send it to schools. I have sought help and hired a college planner person. I meet w/ her on the 1st of aug. I understand some of this makes me sound not needed but its difficult to pay for a private 60k college as a normal middle class family that looks rich on paper.</p>
<p>Sent from my DROIDX using CC App</p>
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<p>Yes…and what you need to realize is that “looking rich on paper” might be what matters with regards to need based financial aid for college. SO include affordable options on your list of schools to apply to.</p>
<p>There is NOTHING that says you must go to a $60K per year school…and you won’t be able to if your family can’t pay what the school says it should pay.</p>
<p>"I am confused as to why a family earning either 100K a year or 300K a year would be eligible for need-based aid, unless they have like ten kids or something. "</p>
<p>You are confused because you are not taking into account the COL of the family. On Long Island $100k is dead-on middle class. You can save for retirement but nor for college.</p>
<p>To the OP - even without knowing the details of your father’s business relationship I can state quite confidently that if your families AGI is $300k then your father did not structure his investment in this business properly. He should speak to an accountant or his banker for advice.</p>
<p>^^^^^ Exactly, these are choices that you have to make. Unfortunately, you are in that bracket with many others where you might be too rich to qualify for need based aid and too poor to be able to pay for an expensive college education by yourself. There are many posters on CC who are in that situation. In that case you have a few choices. You can either take loans (if you can get them) and pay the consequences later on or you can choose something affordable rather than something prestigious (though not necessarily better). </p>
<p>Also, if you have an income of $100,000 a year plus a business with substantial assets (if your father is paying $200,000 as loan payments, then the asset base must be fairly large.) Also, if you have assets that allow you to buy in by putting in half a million, then you must have other assets. Let us say the company (plus other assets you have) are worth $2 million, then you have $2 million + a good income. That might not make you super rich but that may not be considered middle class.</p>
<p>I think the problem is not that your parents do not have the money, it is that money is not liquid and usable. For example if you own a house worth $5 million, you cannot get the money out easily unless you take loan but are rich as many people own homes that are worth $250,000 or less. So follow the advice given here, apply to a mix of colleges and have a financial safety. That is very important.</p>
<p>First of all, look at the FAFSA and PROFILE forms and see how they mesh with your parent’s tax forms. For small businesses, sometimes there are situations that do reflect how large incomes do not enter the family’s personal finances. Unless, your parents’ business falls into such categories, you are not likely to get any financial aid.</p>
<p>As for loans, you can ask the schools and look around, but realize that you are looking at around $60K for that first year and you are only eligible to borrow $5500 in your own name. Any other loans would have to be co-signed, but even then finding a student loan for $50-60K for an undergrad is not going to be easy. Other than Parent PLUS or HELOC, I would be hard pressed to be able to borrow those amounts, and I don’t know if my son could get such loans even with us as co-signers. $25K is usually what I see as a max. Not saying, they are not out there, but I have not seen them. It would be easier for your parents to borrow and you then borrow privately from them, as PLUS is available to them. But bear in mind that interest rates on those amounts is not something ignore. $50K at 7% for just a year is $3500. That’s a lot to pay to teach you to be responsible for your education. If your parents have the funds available, the can save thousands in interest just lending to you directly. Unless they too are planning to borrow to pay for your next 3 years and to repay your loan. </p>
<p>$250K is well into mortgage amounts without the mortgage interest rates since there is no collateral here. It’s something to consider carefully even for families who are well to do. </p>
<p>We are probably going to have to borrow this coming school year, but are trying to put it off as long as we can. Every $100 counts in interest payments as money that could go towards avoiding a loan to begin with. It’s not a cavalier thing to borrow this kind of money.</p>
<p>Not everyone who lives on LI makes 6 figures. I agree that there are differences in COL, and I wish they were recognized in the financial aid process too, as someone who lives in a very high COL area. But, I chose to live here. Yes, I could have gotten a house in a less upscale area for half of what I am paying, but it is my choice. I didn’t want to make the down step from the home we had in the midwest, so when we moved here, we CHOSE to pay the premium. Also CHOSE a good school district, CHOSE to send kids to private school. So I can be as sanctimonious as all get out about how frugal I am about other things like the junker cars I drive and lack of good furnishings and no clothes budget, but I am living in a high COL environment by choice which costs me a lot. </p>
<p>So the answer is not that it costs more for a family making $100K in LI or other high COL area, than it does for someone living in a lower COL area. It’s that way when that family chooses to try to live like the family facing lower costs. $100K in LI means you live less extravagently than if you were earning that in a low cost area. Maybe you rent a small apartment or live in a small house in a less popular school district. You just can’t live as upscale in a high cost area on the same income as you can in a low COL area.</p>
<p>One other thing to be conscious about, OP. If your parents are repaying loans at high amounts and are self employed, there is a good chance that their revenue stream is not solidly reliable. I’ve known more than one business-owning family who suddenly suffer losses or reduced cashflow and then no longer can afford their childrens’ private school fees. It happened especially alot over the last few years.</p>
<p>In addition, with that loan/investment on the books presumably, you parents might run into difficulty running the debt-load ratio to actually cosign your $60k worth of loans. If they have a mortgage plus existing debt and payments, it is possible they would not qualify even with great credit because they may have maxed out the ratio room they have. You will want to make sure you discuss these aspects with them, and take it into consideration when choosing “fiscal safeties” – No parent would ever want to deny their child, and no one ever expects revenue to go down in a business, but both things really can and do happen.</p>
<p>Lastly, a $60,000 student loan, even if it’s only for a year, is 2 - 3 times the federally recommended amount for a student to borrow for FOUR years, just so you know.</p>
<p>Best wishes in your search!</p>