<p>I normally wouldn't be in a position to apply for most financial aid because my dad makes way too much money (well over 100K). However our family has had some economic problems in this past year as I'm sure many others have as well. All of my parents retirement savings and all of my education savings were tied up in stocks which are now at close to 50% of their former values. We have had capital loses of over double my dad's income. Will colleges consider this if I apply for financial aid? I would really like to go to one of my dream private universities but with the current situation its not really financially viable...</p>
<p>Are your parents selling their stock holdings and actually realizing the losses? Do they own your home and any other assets?</p>
<p>Also, as surprising as it sounds to many, a $100K salary can make you eligable for lots of aid at generous private schools. It’s not until you get past $200K when aid becomes unlikely at those schools.</p>
<p>On your financial aid forms, you do not mention capital losses. However, you only report the value of the assets at they are valued at the time you fill out the forms. Schools don’t care that the asset used to be valued at $50,000 in July, but is only $25,000 now (if you were to submit the forms today). They only care that it’s now $25,000.</p>
<p>Realized capital losses will reduce adjusted gross income (AGI), but the reduction is limited to a net of $3000 per year with the rest carried over to the next tax year. So if your father sold stock/mutual funds in 2008 and had a net capital loss of $200,000, then he subtracts $3000 from his income when calculating AGI, and carries over $197,000 to 2009. FAFSA asks for AGI, so this loss will be built into it. Profile has a place for capital losses but limits it to what could be claimed, which is -$3000. From the Profile form:</p>
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