The OP said that there family is living off of money in the stock market and funds from an IRA. Money in stocks that are not in the market are counted at about 5%. So a stock portfolio worth 1. million would yield a contribution of nearly 50,000 without even looking at income. I assume that this family started a 529 plan or some other college savings plan, given their level of wealth and education. 529 plan assets are also count at 5.6%. In addition, they are taking withdrawals from the IRA which is also counting as income. It adds up.
Many people here are expressing surprise that the parents are shocked by the results. I am a well educated, fairly savvy parent and I can tell you, the price of college is shocking. Her parents have not told her she can’t go. They are simply expressing their surprise and dismay. Its something I completely understand. They are telling her not to worry about cost. But she is picking up on their stress. I think, at some point, just as parents need to step away and stop trying to protect their children from themselves, there is a point where a student needs to believe her parents when they tell her not to worry. Its OK for your parents to seemed stressed. Let them know that you are willing to look at alternatives and make things easier for them, but if they insist that they are fine and that this is the education they want you to have, take them at their word
OP- if your dad has been “doing some work” for a company on a consulting, part-time, or project basis, that’s another datapoint as to why you aren’t going to get aid. He’s got to list that income as income- even if it’s not a regular, full time job, the IRS (and therefore, the gods of financial aid) consider it money coming in to the household- which of course it is.
So even if he’s making a small fraction of his previous income, it’s likely enough to push you guys into the “no aid” category- even without considering the dividends, interest, etc. income you guys are getting from his investments.
Make sense?
Big hug to you. You are getting a financial education-- which is a good thing- mixed with some unexpected news on your financial aid prospects- which I’m sure is disappointing. But if you guys can all get on the same page in terms of how much money you can comfortably spend for your education, you will all land in a good place.
@blossom The some work totals to an income of 3,000 a year, so I don’t think that really has much to do with it! But thank you!
I’m on the FAFSA right now. What information should I be looking for?
I’m going to correct you and your mom. With an $85,000 EFC you won’t get ANY need based financial aid…at any college. That EFC exceeds the cost of attendance at EVERY college in this country …every one. Colleges do NOT provide a dime of need based aid to pay the family contribution.
The only thing you are guaranteed to get is a $5500 unsubsidized Direct Loan.
So…add that to any merit aid you got.
Then see if your parents will pay the balance.
One more question…sometimes when folks are laid off from BIG jobs like your dad had, they take their severance or other compensation over multiple years. Did your dad do that?
Yes. He took his severance. He had been at the same company for 33 years. @thumper1 but I’m pretty sure he said he only got severance for a year, which would’ve been 2014.
Look at post #55 to see what you should spot on FAFSA.
The only numbers I see on here are:
How much did your Parent 1 (father/mother/stepparent) earn from working (wages, salaries, tips, etc.) in 2016?
$3,125.00
How much did your Parent 2 (father/mother/stepparent) earn from working (wages, salaries, tips, etc.) in 2016?
$39,789.00
2016 Untaxed Income
Payments to tax-deferred pension and retirement savings plans (paid directly or withheld from earnings), including, but not limited to, amounts reported on the W-2 Form in Boxes 12a through 12d, codes D, E, F, G, H, and S. Don’t include amounts reported in code DD (employer contributions toward employee health benefits)
$3,656.00
On the day you submitted your FAFSA, what was your parents’ total current balance of cash, savings, and checking accounts? $3,000.00
On the day you submitted your FAFSA, what was the net worth of your parents’ investments, including real estate (not your parents’ home)?
$52,000.00
Am I looking in the correct spot?
@MYOS1634
Are you sure FAFSA was even submitted to schools?
Yes, all of my schools received my FAFSA.
Something is totally off if those are the ONLY numbers on the FAFSA.
Your dad has huge investments and stocks…and the net investments is $52,000?
Where is unearned income?
@BelknapPoint where on the FAFSA would this kiddo find things like IRA withdrawals, and sale of stocks or bonds?
Do you have their tax return info in front of you? Did they use the DRT?
You said your dad was withdrawing money from tax deferred retirement accounts. Where is that on the FAFSA, and what amount is there?
I’m not able to find any of the information on the FAFSA itself. Should I look elsewhere? I’m positive he sells tons of stocks and withdraws money from his IRA.
If he sold stocks and withdrew from his IRA in 2016, that would absolutely be ON the FAFSA.
Unearned income?
Oh, everything in those categories says “Transferred from the IRS” no numbers. @thumper1
Right o. Anything transfers from the IRS DRT tool is encrypted.
You would need to see your parent tax return to see what unearned income he had…it sounds like it was a LOT.
Or perhaps he did a IRA or TSA rollover too. And didn’t indicate this properly on the fafsa. That would bump up income…as well.
No way to know…unless you see his tax return…and I don’t think he is going to be giving you that.
Parent taxable distributions from an IRA and gains from sale of stocks and bonds would be reported in FAFSA question 36, as part of Adjusted Gross Income. Parent non-taxable distributions from an IRA and a pension would be reported in questions 45 e and f, respectively.
So if all of this was taken from th DRT, this student would NOT be able to see any amounts in those fields.
With the parent income and assets she reported…there would need to be a TON of unearned income to get to a EFC of $85,000. A ton.
That is why I ask if dad ever actually did FAFSA even for funsies, he would have got a ballpark EFC before submission. What date did your dad complete FAFSA? Can you see the CSS/Profile? Your numbers will not be DRT reliant there and these are much more inquisitive.
Your parents do not owe you this information, they are not deceiving you, this is quite possibly none of your business.
The real answer is to just ask your parents how much you have to spend on college. As it looks, they are on the hook of the whole enchilada, how much that costs depends on where you applied. I expect the answer is nuanced. It is a shame that this discussion didn't take place back in August 2017