Investment losses may reduce eligibility(?)

Paying for College
1

<p>Hello</p>

<p>First time poster, my oldest son will be a Freshman in September, and we just received the initial (unofficial) financial aid offer from UC Santa Barbara. The amount UCSB is asking us pay seems like something we can scrounge together somehow ($9,000 out of pocket, $5,500 in student loans). However, one line in red toward the top of the offer caught my attention: "Tax transcripts that reflect business and investment losses may reduce eligibility."</p>

<p>I have fairly substantial rent & royalty losses of $26,000 (Schedule E, line 17 on 1040) and a $3,000 write-off for a capital loss (Schedule D, line 13 on 1040).</p>

<p>I am probably just being paranoid (I hope), but do colleges ever change their aid offer substantially for this kind of case? That is, is there a chance that UCSB will add any or all of these losses back into my income, and reduce their financial aid offer proportionally? Does anybody have experience with this sort of thing?</p>

<p>I'll probably call the financial aid office and talk to them, but wanted to get some insight into this before I did.</p>

<p>Thanks,</p>

2

<p>One of the things that FAFSA does is estimate the state tax liability you have incurred. So if you are going to get a reduction in state taxes due to losses, it could impact the nubers since, their estimate will change accordingly.</p>

3

<p>Both my federal and state taxes were reduced due to the losses (I believe my state income tax was reduced to 0, or close to). I don’t have my EFC calculation worksheet available right now, but I’m pretty sure there was some kind of state tax estimate that was added to the amount I was able to subtract from my income. Are you saying that I’m in danger of this amount (nearly $5,000 if my memory serves) being added back into the EFC calculation? Or even worse, am I in danger of much of the losses being added back into my income?</p>

<p>Thanks</p>

4

<p>Yes please let me know too. My parents also had large business losses and I would hate to lose my need money.</p>