<p>Hello,</p>
<p>I don't really know the answer to this, so I was hoping you can help me. My parent's income tax forms said that in 2008 they made about 100k, but they have about 50k~100k (if not more, I think I heard 140k once) in debt (they always remain vague in the numbers). </p>
<p>When I was accepted into colleges as a freshman, I received little to no aid from a lot of schools, and when I talked to them, they said since my EFC was high I didn't need any financial aid. </p>
<p>Now that I'm applying as a transfer student to colleges like CMC, Notre Dame, UChic, UPenn, and Brown, I'm wondering how I can make my financial situation absolutely clear, because my parent's gigantic debt makes it difficult for them to finance my education (even at my state school). </p>
<p>Now is debt already taken account in the EFC? Or is this something "extra" I must inform my prospective colleges?</p>
<p>Thanks for your help!</p>
<p>In general, they do not consider consumer debt (credit cards, car loans, etc). They do consider mortgage debt when determining home equity for the Profile or individual school FA forms. Medical debt MAY be considered as a special circumstance but that is usually done later in an appeal process and you need copies of your medical bills, insurance statements and income tax returns to back it up.</p>
<p>Debt is not taken into account by FAFSA. The only debt that is taken into account is a debt directly against a reportable asset. For instance if your parents owned a second home then the reportable value of that home on FAFSA would be it’s value less any mortgage against it.</p>
<p>If the debt is related to something like medical bills then a school may consider making an adjustment (with lots of supporting documantation from you) to reflect the debt. For most types of debt, such as consumer debt, they will not.</p>
<p>Thank you, is it still worth asking them? Because I feel like I’m at a huge disadvantage now.</p>
<p>As the others imply, it’s not a question of clarity about your parent’s debt; it’s the methodologies used to determine EFC.</p>
<p>Unless the debt is because of excessive medical bills, debt is viewed as a “lifestyle choice” - often resulting from purchases that weren’t affordable.</p>
<p>You need to **also **apply to schools that you can afford since your parents’ incomes are going to negatively affect the aid that you’ll get. Since they will likely be given an EFC that they can’t afford to pay, that will be a problem because they will be unlikely able (or willing) to borrow the money to cover their EFC. They also won’t likely qualify to co-sign loans for you.</p>
<p>You may not think this is fair, because you’ve probably have done well and have tried hard. It’s not the schools’ fault when families accumulate too much debt.</p>
<p>Does that makes sense?</p>
<p>So, what are your best/better in-state schools? Can you commute to any of them?</p>
<p>How much can your parents pay each year for you education?</p>
<p>Colleges are not sympathetic to families that go into debt buying things, then using income to pay down debt instead of using income to pay for higher education.</p>