Hello, I am new to all of this and I have some questions around financial aid. I lost my job in Feb of 2016 and I have been unemployed since. It has been a struggle to find work in my field and at this point I am not sure if I will return to work or simply simplify our lives and retire. The good news is that I had saved well during my career and have approx 1.2 million in current assets. Annual income for my family of 4 consists of about 45k per year which comes from a rental property and investment income.
Is it safe to assume that because of my assets that we will not be eligible for any financial aid assuming my situation remains the same? My daughter is currently a Junior and as a previous high income family I had always assumed we would not get any financial aid at all so I have pretty low expectations but hope to be pleasantly surprised when the time comes. Thanks for your opinions
You might qualify for the simplified needs test but really…it will be based on your circumstances when your daughter applies next year.
If you qualify…your assets are not considered for FAFSA purposes. HOWEVER, if your kiddo applies to schools that use the Profile or their own form…there is no simplified needs test.
To qualify…you would need income below $49,999
And one of the following additional criteria.
Dislocated worker.
OR
Able to file a 1040A or 1040EZ form (I don't think you can do this if you have rental properties and investment income..).
OR
Qualify for a means tested benefit like SNAP or free/reduced lunch.
The 2018-2019 fafsa will use 2016 income.
Where is this saved money? Is it all in liquid accounts? Is any of it in retirement accounts?
Does your spouse work?
ETA… so if you do qualify for simplified needs, your assets would not count, but really even if you had a $0 EFC (with $45k in income yours would be higher than $0), your max guarantee would be a Pell grant of $5800 or so, and a $5500 loan. Just FYI. It’s not a guarantee your college bound student would receive a full free ride.
It would be very important for you and your child to find a U that is affordable in case NO FAid is offered, such as an instate public she could commute to. Also look carefully for Us that may award significant merit to your D for grades and test scores.
Some students find it more affordable to go to CC for a few years while living at home and then commute to instate U.
The saved money is in a combination of savings/checking and investment accounts. It dos not include retirement accounts. If it is based on my 2016 income then my income would be well over the $49,999 mark since I received a generous severance package in Feb 2016 when I was displaced.
We do currently qualify for free/reduced lunch here in NC since it is based on current income and not assets. I have not applied for the free lunch program though. Would it be advisable to apply to the free reduced lunch program? I know that if I do then many of our college application fees would be waived?
Honestly, I am not trying to game the system and applying for free lunch when I have a good amount of assets in the bank feels kind of icky. But…at the same time I don’t want to let pride get in the way of me doing something that makes sense.
I had the same moral struggles when I was deciding if I should apply for unemployment benefits when I was laid off.
As it should. Really, as a taxpayer, I don’t much care to be paying for your kid’s lunches when you have $1.2M in non-retirement assets. It would be best to look for merit aid or lower cost in-state options.
Also, this poster appears to be posting as both parent and child.
As mentioned, the FAFSA only schools usually give lousy aid no matter how low your EFC is.
The CSS Profile schools will eat you alive with your assets.
Have your kids apply to at LEAST THREE schools that you KNOW FOR SURE they will get admitted AND you know FOR SURE that you’ll have ALL costs covered thru merit scholarships and family funds.
I’m not sure how you can contribute much/anything towards college if your income drops to $45k per year. Assuming that your home is paid for, that $45k will simply go for living expenses and property taxes.
Maybe wife can get a job to supplement that $45k so that you’ll be able to at least pay for room and board. Free rides are rare. You may find some free tuition awards, but you’ll still have to pay the $15k for room, board, books, fees, etc.
You’re instate for NC. UNC-CH uses CSS Profile, so your assets will keep you from getting aid.
UDel is an OOS public. you won’t get aid from there.
Your DD has an ACT 28. Not high enough for much merit at the better schools that would leave you with a low net cost… Have her work on her test scores and also take the SAT.
Thank you for your responses #mom2collegekids. . My daughter is actually taking the ACT today for the 4th and final time. Fingers crossed. I’m going to go under the assumption that we will get no aid but perhaps will get some merit from OOS schools we are looking at. I think South Carolina will offer some merit to offset the OOS tuition with my daughters grades and ACT score.
From other threads…this poster is from NC. The daughter is looking for a direct admit nursing program which supposedly doesn’t exist in NC? Is that true?
I would agree…look for schools where costs are lower. And for merit, this student needs to improve their ACT score.
USoCarolina is getting a better app pool each year, and the merit awards are getting more competive. An ACT 28 won’t bring in that much to counter the high OOS rate.
DD needs to take the SAT…she may do much better on that. My kids did much better on the SAT.
How much do you think you can pay “per year” towards college? If you have more than one child, and each one costs you - say $25k per year after aid/merit - are you ok with losing $200k of your investments?
Would it be worth it to perhaps purchase another profitable rental property to increase income?
It sounds like you’re both young enough and smart enough to figure out a low-risk way to bring in more income.
What is DD’s major and career goal? Nursing? Does she need Direct Admit?
Seems like she prefers flagships. Is that correct? Does she want the rah rah big school spirit?
Just an aside, but are you having to purchase health insurance now? Is that paid for out of the $45k per year gross income? (Is that $45k gross or net?)
We are prepared to pay 25-30k per year out of pocket for college. My daughter took the SAT once and scored an 1190. For the ACT she took it 3 times so far with a composite score of 23,25, and 28. She is taking the ACT for the last time today. We don’t have plans to take the SAT again since she seems to have been getting the knack of the ACT and her prep course focused on the ACT rather than the SAT.
My DD’s wants to be a nurse. We are certainly flexible on college choices and are not looking only at flagships. The lack of direct admit nursing programs in NC is our main concern. We hate the idea that with nursing being as competitive as it is that my DD would have to jump to another school after 2 years if she doesn’t get into an upper division nursing program.
At this point I think we will most likely be looking a 2+2 in-state nursing programs at UNC-CH, UNC wilmington, and ECU. If we are able to get decent merit awards at south carolina or to the direct admit nursing program at Delaware then we would give those strong consideration.
Yes, we are purchasing health insurance now through the ACA. The 45k per year income is gross income, but like I said, we have good savings so with a little cost cutting we will be fine.
Your budget can easily cover UNC-CH. They now gaurantee fixed tuition (don’t know about fees) for four years. Also they are very flexible about meal plans (including no required meal plans) so it can be easier to cut cost if needed.