<p>I've heard multiple times that small business ownership leads to terrible need-based financial aid, but I've also heard that if the business employs less than one hundred people, you don't have to report it as an asset on the forms. </p>
<p>So would this mean that small business owners' kids only get bad financial aid if the small business has >100 employees? Or do they get bad financial aid regardless, just because they have the business, even if it's small and makes like... 40K a year?</p>
<p>Thanks, guys. :) I just wanted to check up on this, so I know if I should even bother to apply to private schools.</p>
<p>I think the issue is that if the small business has any assets, like vehicles or a building or a large inventory of some kind of 'stuff', those assets will be counted as available for use towards paying for school. I'm sure someone will chime in who knows more than me.</p>
<p>Do you think that it counted against you a lot?</p>
<p>And if there's a small building, like a storefront about the size of a pizzeria, does it really qualify as a significant asset? And does "available for use towards paying for school" mean that they expect parents to sell their workplace to pay for their kid's college tuition?</p>
<p>Thank you very much for answering... but I think I just got more questions, ha ha. But I guess it's better to ask more questions and clear everything up rather than assume. :)</p>
<p>The College Board has a list of colleges & scholarships that use the Profile. My D is looking at LACs, & almost all of them require the Profile.</p>
<p>We have a small business and rent out a farm. We don't have to report the small business on FAFSA because it is less than 100 employees. We DO have to report the farm as an asset because we no longer live there (the farmland is rented to a relative).</p>
<p>My S goes to a FAFSA school and neither of these situations have hurt his financial aid package, so I'm guessing it is the Profile schools that you are hearing about.</p>
<p>My understanding from the FAFSA was that we had to report the building our business owns...we do not have over 100 employees..not even close to that. The FAFSA considered the building an asset that could be sold or borrowed against to pay for college...
I'm sure if I am wrong someone will correct me but I included the asset of the building in our FAFSA paperwork.</p>
<p>You don't have to report any small business assets on the FAFSA if the business employs <100 employees. However, the PROFILE is MUCH more extensive, and most colleges require a small business supplement on top of that.</p>
<p>The question of how to interpret that supplement and your answers to PROFILE questions is really up to the college, and that's where colleges with better finaid (browse these forums, look at the Princeton Review ratings, check endowments per student, etc.) will distinguish themselves from colleges with worse aid. Nothing I've seen so far has led me to believe that a college expects my father to liquidate any of his small business assets (though someone in a related thread seemed to be suggesting it :-p ), but just try to make sure that any debt incurred (e.g. as start-up costs for the business) is as paid-off as it can be, so that you don't have investments lying around. That was our big mistake, I think, though everything turned out happily in the end.</p>
<p>Run your EFC via the finaid.org calculator and apply to some good FAFSA only schools so that you can see both packages. Sometimes FAFSA only schools have less money to give, so it is highly variable.</p>
<p>In our case, as a self-employed person and long time homeowner on the west coast (therefore high home equity due to appreciation, but cannot afford ot access it and still live in it) we learned that FAFSA works out better for us. If that is your case look for good FAFSA only schools that are a match.</p>