<p>Getting ready to seriously look for fin. aid for 3 college-age students, and are wondering will the CSS Profile make of this financial situation.</p>
<p>8 years ago we bought a house over an hour's drive from our work & school, found out we cannot live with the the commute, and have been renting it out ever since. </p>
<p>So we are renters in the house we live in, which is 10 minutes from work & schools. CSS Profile asks, "Do you own or rent your home?" I have to answer "rent." I own A home, but not the one I live in. The one I own, I rent to someone else. I am a tenant myself.</p>
<p>Our income has us eligible for Reduced Price Lunch for many years. We save, we don't spend; and have close to $200 K in Non Retirement assets. 4 dependent children age 14-21. The house we own is worth about $150K and we still owe $80K on it.</p>
<p>QUESTION: Would the students be SIGNIFICANTLY better off under the CSS Profile if we quit city living and moved to the 90-minute-commute property so that we don't own a "rental property", just a "residential property"? </p>
<p>If so, do I need to move BEFORE we fill out the CSS, or can I do so at the end of the school year? (I don't have anyone in college right now--3 kids ready to go next year.)</p>
<p>Thanks for any advice.</p>
<p>so your kids will be applying THIS YEAR to go to colleges next year? correct? If so you’ll be filling out the FAFSA and Profile early in 2012. . Since you only own 1 piece of property, I’d guess that it wont matter where it is or if you live in it. What they want to know is how much equity you have in it that you could “potentially tap” and that wont change regardless of who lives in.</p>
<p>You say that you have qualified (and continue to qualify) for reduced lunch? This is a means tested benefit. I believe if your income is below $50K and you received free lunch (that is one of the second criteria I believe…receipt of a means tested benefit)…you would be eligible for the simplified needs test and your assets would not be listed at all.</p>
<p>I hope Swimcatsmom sees this because I could be wrong.</p>
<p>If you don’t qualify for simplified needs on the FAFSA…the house you are renting out (the one you own) will be listed as an asset. The current equity of that house will be listed as an asset (value minus mortgage)…and any rents from it will be listed as income. It is not your primary residence so that is what you must do on the FAFSA. </p>
<p>For FAFSA, your primary residence (the rental) doesn’t get listed at all.</p>
<p>For CSS Profile schools, the house you own (that rental) will be viewed as an asset as well…but it might not be much of one for either FAFSA or Profile as the equity in it is what is counted.</p>
<p>*Our income has us eligible for Reduced Price Lunch for many years. *</p>
<p>Does that include your rental income?</p>
<p>Do you have triplets that will be starting school? If so, then once the EFC divides with 3 in school, your EFC might be 0 anyway.</p>
<p>However, who knows what a CSS profile school might do.</p>
<p>The income level is ONE of the criteria for simplified needs.</p>
<p>The means tested benefit is another.</p>
<p>If your AGI is <$50,000 and you receive for means tested benefits, then for FAFSA you will be eligible for the simplified needs test where assets are ignored.</p>
<p>CSS does not have a simplified means test as far as I am aware (I am not very knowledgeable about CSS). However, if your property is worth $150,000 and you owe $80,000 on it, then your equity in it (which is what you report) is only $70,000.The $200,000 non retirement assets will have more of an impact.</p>
<p>The other consideration is that CSS schools may treat your income differently from FAFSA, especially relating to any deductions you might take because of the rental property.</p>
<p>Thanks everyone.
There is no rental income; there is only loss, because of depreciation. </p>
<p>I don’t have triplets, I have high school graduates who have been working & volunteering overseas. At least 2, and hopefully 3, of my 4 kids will be in college next fall.</p>
<p>Sometimes my AGI is $50,000 or less, and sometimes it is a little more; I get mineral royalties, and I never know if it will be $2500 or $25000 from one year to the next. Sometimes a month delivers a huge surprise one way or another. Because of the number in my family we always qualify for that reduced price lunch.</p>
<p>I wonder if the theory is that someone with $200,000 in bank & stock accounts should spend 1/3, 1/2, 3/4, or all of it on the first one, two, or three children, leaving nothing for the remaining children, later years of school, retirement, emergencies, etc. And should someone who owns a “rental property” sell it (as if I could) to pay for college, even though it’s the only house I own. Anyone here understand the philosophy behind the I.M. in this regard?</p>
<p>For FAFSA the maximum amount of assets that go to the EFC is 5.6% of assets over the protected allowances. I don’t know exactly how CSS accounts for assets (it will vary by school), but I doubt that they would expect all your assets to go toward paying for school.</p>
<p>
This isn’t totally correct, since you deduct expenses from the rental incomes. Hswarden, do you file a Schedule E for the rental? If so, do you normally have a gain or a loss from the rental? That will tell you something about how they will look at the income.</p>
<p>Crossed posts. If you have a loss AFTER depreciation, what about before?</p>
<p>“I get mineral royalties, and I never know if it will be $2500 or $25000 from one year to the next. Sometimes a month delivers a huge surprise one way or another.”</p>
<p>A word of advise- Some Profile colleges will want to attach a value to the assets, land or Trust that is the source of the Mineral royalties, AND include it in your assets, regardless of whether you have any control over the land or the trust. Happened to us with U of Chicago. They offered ZIP in FA ,in contrast to other colleges, and were the only ones asking for lots more info about the mineral rights . Beware!!</p>
<p>Schools using the IM have varying formulas for determining need based aid awards. There really isn’t any way to predict how these school will view your assets. The Profile schools have such varying formulas, it’s hard to predict. If there is a school with their OWN financial aid calculator on their website, use that one to get a guestimate of what your family contribution might be.</p>
<p>If your income is over $50K per year, your assets will be counted in the mix. There is an asset protection on the FAFSA for you but it is not $200K…Any amount of parent assets above the protection allowance is assessed at about 5.6%. </p>
<p>If you have three students in undergrad school at the same time, this should help a little in terms of family contribution. For example…if you had only ONE student in college and your EFC was $9000…with three, EACH child would have roughly $3000 EFC. </p>
<p>Re: retirement…that money should be in retirement accounts, not in regular savings. For financial aid purposes, the balances in retirement accounts (TSA, IRA, for example) are not counted as assets. BUT the contribution in the year for the finaid forms is added back in as income. Still…the balance is not considered an asset for financial aid purposes by most places (some Profile schools do ask for the balances in these accounts but no one seems to know how they are used).</p>
<p>You are guys are awesome! You have helped me a LOT.</p>
<p>Sylvan8798, the net income/loss from the rental varies a bit from year to year. This year we will probably come out almost even before depreciation. I am wondering why you ask. Surely the CSS doesn’t go into all the details of the Schedule E, does it? so far as examining expenses vs. depreciation? Don’t they just look at the bottom line?</p>
<p>MenloparkMom, did the university come back to you for that data on the value of the mineral rights? I cannot imagine how I’d deal with this. Every so often the gas company wants to drill another well, and it may result in a check this year or next year or the year after. Who can say what the value of the interest is?</p>
<p>From what I have heard, CSS may add back certain expenses, such as depreciation.</p>
<p>"MenloparkMom, did the university come back to you for that data on the value of the mineral rights? "
Yes. We had no way of knowing the “value”, but they did some projections based on a certain % payout per year and voila’- no FA from Chicago. They were the only ones who did that, and I’m told that things have changed there, after they got such a bad reputation for their niggardly FA.</p>
<p>thumper1, that money SHOULD be in retirement accounts, but most of it came to me when my mom died, unhelpfully, a year before the first kid reached college age. She helpfully left me a pile of money which I definitely need for retirement, but the government limits how much we can put in retirement in one year. So it’s left in this completely unprotected pile, and I guess it will go to colleges. All those years I thought our low-income and no-assets would help the kids go to school, but mom left me the cash AND the mineral interests, and there went my plan.</p>
<p>All those years I thought our low-income and no-assets would help the kids go to school, but mom left me the cash AND the mineral interests, and there went my plan.</p>
<p>I’m sorry, but do you know how this sounds? It sounds like you were fine with other taxpayers paying for your kids’ college costs, but not you (using a windfall of money from your mom).</p>
<p>And, BTW, are you aware that most low-income people do NOT get much aid for college. You may think that there’s all this FA out there to be handed out. There’s not. Most schools cannot meet need. Most can only give federal aid which does NOT cover college costs. </p>
<p>Most low income families do not get large amounts of aid to pay for college…that is a myth.</p>
<p>If you want to protect your assets, then have your children apply to schools where they would get large merit scholarships. If you want them to go to dream schools or other more luxurious choices, then be prepared to pay for those choices.</p>
<p>Oh, and…you mention that some of your kids have been working. If they have earned more than about $5k in 2011, then that income will also affect your EFC…and if they have any savings, that will also affect EFC.</p>
<p>it sounds to me that they need to consider schools that will give them generous merit scholarships.</p>
<p>To the OP…while your income is lower. Fortunately your mom left you with some nice cash assets to at least help you with college costs and/or retirement. Yes, there is a maximum you can put in these retirement accounts each year…hopefully you have been doing so if this is financially possible.</p>
<p>Your parent asset for FAFSA purposes is assessed at 5.6%…which is only a small portion of that asset per year. Many folks don’t have that money whether low or high income. I know you had hoped to have that money reserved for other purposes, but it’s there…and will be helpful for college purposes to some extent.</p>
<p>If you qualify for the simplified needs test, you will not have to report your assets. Of course, that will be income dependent in your case.</p>
<p>The key for your will be to identify colleges where your student(s) might be eligible for merit aid awards too…OR places that are more affordable for your family. Almost EVERY family looks for these options…they help make college MORE affordable.</p>
<p>I’m not wondering about the FAFSA, because I see the government spends most of its education subsidies in ways that support all students, not just low-income/low-asset or “been-working-on-how-to-qualify-for-aid-since-birth” ones. </p>
<p>So what I understand is that while the College Board analyzes the CSS to a certain extent, each school may (or may not) individually interpret factors such whether or not we live in the house we own (and “the folks have a big pile of cash, but very little in a retirement plan”). </p>
<p>So there’s no general answer to the question, “Will the student qualify for more institutional aid if the family resides in the house it owns, versus renting it out.” We could call the school we are looking at, and perhaps they will just tell us how they’d view this situation.</p>
<p>Is that right? Again, I thank you for sharing!</p>
<p>
On this we’ll have to disagree. The only (federal) gov’t education subsidies I know are tied to means testing - Pell Grant and Subsidized Stafford Loans. People above an income level won’t get subsidized loans but unsubsidized for which the loan recipient has to pay interest from day 1.</p>
<p>I’m talking about tax-payer funded support of the institutions & their programs, not aid to individual students. State as well as federal. A portion of the cost of running a college or university is paid by tuition & fee assessments to students.</p>