<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. "</p>
<p>You are incorrect. By almost any measure the COL as a percentage of AGI on LI is higher than almost anywhere in the US. This fact makes the FA process unfair since it does not take into account COL.</p>
<p>I also don’t agree that ones choices 18 years ago should be an argument to support not accouting for COL during the FA process.</p>
<p>Mazewanderer basically “hit the nail on the head”. All of our money is assets. Real estate and continously growing equity in a business. I have taken your advice and decided to apply to a financial safety. UMD. I also meet w/ a college planner who is supposed to be an expert in a week. Thanks everyone for your advise</p>
<p>Mazewanderer is right as usual! I own a S-corp and was in a similar situation last year before my youngest went off to college with dreams of an expensive private. I wrote a detailed letter to all her accepted schools (I did not have the accountant do it) with documentation (corporate tax return which is asked for anyway) to back up my letter. Not only do those loan payments show up on paper as income but you have to pay taxes on it! Some colleges gave me consideration for the loan payments and some did not. This year, loans are paid off, but total income down with business losses. On paper I look less well off, but but we’re actually better off (without the loan payments) and the financial aid package is a several thousand less this year which seems fair and accurately reflects our real financial situation. PM me if you want more info.</p>
<p>The CSS Profile has a section at the end where you can give explanations beyond the actual numbers. Colleges also have forms for “special circumstances,” though don’t know if that would apply here.</p>
<p>Most importantly, the financial aid staff are all human beings who you and your parents can meet with to explain the situation.</p>
<p>You may be able to get an adjustment, even if slight, by communicating with them. Having documentation of the loan payments for the business would help a lot. The FAFSA and Profile have questions on this type of thing and if, for technical reasons, your parent’s loan payments are not reportable in those forms, then he should try to present the case anyway, with whatever documentation he does have.</p>
<p>Just my 2 cents. And by the way, early action is fine in your situation. You can still apply to other places and let the schools know by May 1st, but you find out early.</p>
<p>compmom - There is nowhere on the CSS or FASFA to explain the business issues. Business loans, unless they are personal loans out of your personal bank account, not the business checkbook, cannot be explained until corporate taxes are sent in, usually at the same time the individual taxes are sent. I found that attaching a letter to point to loan payments and the effect on profit/losses was helpful.</p>
<p>12Art…one more piece of free advice. Often business owners file their taxes on the very late side (sometimes as late as October). For the year you will be a college freshman it is VERY important that your parents plan to file their taxes as close to February 1 as possible. The FAFSA (and if necessary the Profile) can and should be filed ON TIME (meeting the deadlines of your colleges) using estimates which should be as accurate as reasonably possible. HOWEVER, the colleges will not finalize nor disburse your aid (if you receive any) until your FASFA and Profile forms are amended to reflect the data from the correct years’ tax forms. </p>
<p>I know that business owners do deal with this so perhaps someone here can tell you what they did if they were truly unable to file their taxes earlier.</p>
<p>And FYI…some schools (not all, but some…both of my kids’ colleges did) require these financial aid forms for consideration of merit as well as need based aid.</p>
<p>Thumper, my accountant gave me a preliminary tax report to do the FAFSA and Profile. I then had to push him to file taxes ASAP so that I could have the completed and signed forms into financial aid in order for D to make a college decision by the May 1 deadline. It was stressful, especially since I had to do the business/farm supplement (my accountant had never seen such a form). The second year it has been so much easier and the school didn’t seem to want the business/farm supplement. All I did was submit the CSS, Profile, and send in taxes. Since loans where paid off, I didn’t have to explain special circumstances. As a result, aid was reduced by several thousand this year which I felt was fair.</p>
<p>There are a lot of inefficiencies and inequities in the financial aid system. The COL inequity is one that has been raised. But that is the state of being right now and since the climate is for cuts, not increases, that is what we have. If you live in LI or other expensive area, you have to pay more for certain amenities like housing to live like counterparts in less expensive places. You get the benefits of living there as your reward. You can lower your standard of living in order to have more disposable income. That’s just the way it works. </p>
<p>There is a lot of unfairness in life and in the college scene. Living on LI, your college aged students have the options of the low SUNY, CUNY tuitions that kids in some states would love to have. If you live in the Pittsburgh/Philly area, you are stuck with $16K base tuition for Pitt/Temple or take the community college route. </p>
<p>My DH comes from an area where a $100K house can be obtained in a good neighborhood. Can’t touch the property and the house here for under a half million, even in areas that are considered depressed neighborhoods. But try getting a high paying job in that area. They are scarce. We have NYC with a constant rotation of jobs and even in these uncertain times, my husband has managed to have an income with all of the options out there. That is the advantage of living here, and why we cannot live there. The type of work that he has done, enjoys doing, does well and that has market does not exist in former home area.</p>
<p>" Rathole data - about Long Island and middle class. "</p>
<p>Your primary assumption is wrong: You have applied your definition of “middle class” to the median income data of a location where you do not live. You also need to take into account what that median family income purchases.</p>
<p>Since I do live on LI I can state with certainty a family income of $87k in Nassau will not enable you to have any savings beyond retirement savings, if any.
Is that part of your definition of middle class - a family that has no savings?</p>
<p>The data you provided is for 2002 and has lost a lot of it’s relevance. You should be aware that school taxes have easily doubled on LI over the past ten year period while the median family income has only increased by single digits.</p>
It’s true I do not live on Long Island but I did live in the NJ burbs of NYC which has essentially the same issue … in fact I have lived in the DC, SF, LA, NYC, and Boston areas (a pretty big subset of the hit list of most expensive places to live) … so I understand the issue and stand by the data I posted. It is somewhat dated but I only spent about 2-3 minutes looking … I pretty confident if I found the latest data it would not be substantially different … I’ve been on CC for 6-7 years now and have done the same look-up 20+ times including even more focussed areas like Manhattan of SF proper and the same thing always shows … the median family income is way below what posters are defining as middle class and as an income that limits choices. </p>
<p>
Well this part we partially agree on … what $87k will buy on Long Island is not even close to what it will buy in lots of other locations. However it is also true families decide how to spend their upper middle class incomes in the regions they choose to live … and the most common response is well we wouldn’t want to live THERE (where the majority of people in the area live) and that’s a perfectly fine choice … however labeling it “middle class” because it’s typical for the life-style the family chose does not make it “middle class” among the full population of folks who live in the area.</p>
<p>PS - I do not want to rathole your thread … and hope you get advice that helps you with you situation!</p>
<p>No need to argue. Congress passed the law for fafsa (and EFC) and it is what it is. COL is only really taken into account (supposedly) for state/local taxes.</p>
<p>3togo - Why are you only focusing on the income side of the equation? Only using median family income in this discussion is meaningless without also relating that income to necessary expenditures (housing costs, rents, school taxes, general taxes, insurance, etc…).</p>
<p>A simple question: Is a family that is not able to save for college a middle class family?</p>
<p>When we moved here, we had the choice of spending more money on a house than we originally budgeted, or cut down on the type of house we wanted. There was housing available at our budgeted amount but not where we wanted to live nor in the houses we liked. That was our choice. And, yes, we made that choice 10-15 years ago. </p>
<p>The formulas have their flaws. I know a family who has been struggling to make ends meet. They live in a nice neighborhood in a small house that has a high market value because of the area. They’ve lived there for 20 years and got the house from a grandparent’s will. The financial aid process was not good to them at all, since most PROFILE schools do take home equity into account and that does really knock them up their in terms of wealth though their income is moderate, and they have few other assets. Can’t really afford to borrow, because they can’t afford another payment. Puts them in a bind in terms of college choice.</p>
<p>Not that the FAFSA form that does not take home equity into account helps either since those schools do not tend to meet full need and their EFC does not make them PELL eligible. They make just enough to qualify for some loan subsidization of the Staffords if their student take them.</p>
<p>So, it’s the local state schools for them. Privates are not willing to give financial aid, the merit money still doesn’t cover enough of the private cost premium, and the sleep away option is too expensive even at the SUNYs. Fortunately we do have CUNYs and SUNYs where our residents can commute and the tuition is affordable.</p>
<p>Really, FAFSA is not going to help most of you much anyways. To be PELL eligible is a far cry from middle class, and the max from that is $5500. The benefit LI and other NYC high COL areas get in terms of low state school options is far more valuable than the small subsidization of the Staffords that you might get with COL taken into account, a benefit that may be eradicated in the near future anyways.</p>
I seriously do not want to rathole your thread … the last comment I’ll make is to challenge the wording of the question … Is a family that is not able (partially because of family decisions over the past 20 years) to save for college a middle class family?</p>
<p>I really do not want to rathole your thread and paying for college is a challenge for 95+% of families in the US and I hope you do find a good solution to your situation … I’m pretty liberal and the hairs go up on my neck when the definition of middle class is being stretched upward covering folks upto the 95-98% range and when the options of those truly middles class (income in the 35%-65% range maybe) is downplayed by those calling themselves middle class.</p>
<p>I have seen families who have put ours to shame in what they have saved, given what they have made comparatively. I have seen low income families save for college and other things that are important to them.</p>
<p>I am not about to advocate any person working himself to the bone, cutting many essential and important things in life for their kids to go to a private sleepaway college, but I have seen it done. </p>
<p>The way it works, is that most people in the US have an affordable college option for the first 2 years at least. After that, it becomes more of an issue. It is not a right to go away to a sleep away college anymore than it is to go to boarding school or to any private school, in your pre college years. Why do people suddenly think it is their right to go to private schools after sending their kids to public ones all of those years? There are far more opportunities for most kids to go to a private college affordably, and to go away for college than there are in the pre college years to the extent that we have gotten to think of it as a right, not a privilege and a luxury.</p>
<p>I have learned a ton from this threat. Thankyou. Somebody asked how UMD is a financial safety for me when i live in Pennsylvania. The answer is that my parents feel a $25,000 is a comfortable tuition to pay compared to the 40-45 thousand dollar stickers of my favorite schools. I will be sure to raise the tax report question w/ the college planner.</p>
<p>Another person raised the point that being a business owner, income is not a steady thing and could drop. The business is consists of multiple multi-million dollar franchises, of which my father is buying equity from the original owner by taking a loan from the original owner and paying him back w/ the quarterly checks we receive from the equity we are paying off in the business. That is why banks won’t see it, (however now i see how the taxes will be able to show it) In other words, there is no fear of income going away, instead it will only be increasing as we buy more equity but, that won’t change the money we live-on until the business is completely ours and the loans are payed off - taking at least another 7 years according to my dad.</p>
<p>My impression from this thread is that the FASFA nor the other profile will be able to show this accurately. However, now with the knowledge that i can send in extra documents explaining this situation, i feel alot better. I also didn’t know that there are people we can sit down and speak with about the financial situation at the college (I forget who wrote that above, but thankyou)</p>
<p>12Artleys, as a PA resident, you have a number of in state choices within the $25K range as well. PA is one of the states with high tuitions for their flagship schools. but they are good schools and the price is comparable.</p>
<p>The above are the total costs for attending UMDCP…$34026…which includes room/board/tuition. You need to look at total cost of attendance…not just tuition.</p>