In accordance with the IRS definition: “A farm is a tract of land cultivated for the purpose of agricultural production. A farm is classified of having $1,000 or more of agricultural products being produced or sold.” We don’t have agricultural products we are producing or selling. It is a bit confusing: https://ruraltax.org/files-ou/Farmer_Definition_Final.pdf
Here is an important piece of advice.
What counts for IRS purposes can be VERY different than what counts for financial aid purposes.
You have said you own farmland that you lease out. The equity value of that farmland WILL be considered as an additional asset for financial aid purposes if it’s not your front and backyard to your primary residence.
And many many colleges cap the equity value of the primary residence for financial aid purposes…but use 100% of the value of any secondary real estate. Colleges do not give need based aid so that families can own secondary real estate of any kind.
Re: your niece. Again…she might not be considered as a member of your family OR an additional dependent in college. Again…doesn’t matter if you declared her in your taxes. This will be something to discuss with each college. However, she is over 18…so it migh not matter at all.
This needs its own post. You say you are getting unaffordable net costs using the net price calculators. Even adding that $8000 or so to you income…you say you had about $60,000 in actual income…so that would bring you to under $70,000 a year.
Just curious which Ivies are giving you unaffordable costs? Because with a $70,000 income and typical assets…they would be very generous if she got accepted. Well…unless that farm is worth a lot.
But, use the net price calculators with extreme caution…yours is not a typical situation.
Ok…so the “farmland” is part of your Oregon primary residence. That’s a good thing. Just make sure the total value of the house(s) and land are reflected accurately on your Profile for schools that require that.
The rental income for 2017 will need to be reported…regardless…on both the FAFSA and Profile forms.
^ You child is a rising senior, correct? If so, I believe that the taxes for FAFSA calculation for this coming year would be your 2016 taxes. Therefore, how you declared your farm in 2016 is what will be considered. Also, most prestigious schools require the CSS Profile, a much more detailed and comprehensive form with respect to assets.
Your original question was about where your child could get merit scholarships. Here are some ideas of places where full tuition is possible (but EXTREMELY competitive). I can’t speak to the art history/art preservation aspects. Again, everybody applying to these will have profiles similar to or better than your daughter and the chances of getting them may be 2% or less. Therefore, she should have some true admissions and financial safeties lined up too.
Universities: Vanderbilt, Duke, Wash U, U of North Carolina, Case Western. Case and Wash U have excellent art museums very close at hand. Ohio State also has some generous merit scholarships (Morrill?) but I don’t remember the details.
Colleges: Rhodes, Centre, Denison
Regional public universities: residence in Oregon qualifies for WUE (Western Undergraduate Exchange) reduced tuition at many western state universities. Some flagships are excluded like most of the UCs and UW-Seattle. However, there are schools like U of NM, which has a reputable honors program. ASU, while not WUE except for some specific majors, has a nationally ranked honors program (Barrett) and offers good merit for strong stats OOS kids.
Also, read @Lindagaf 's thread about “average excellent” students for a wakeup call about how competitive the admissions landscape is these days. There is an earlier thread, similarly named, that inspired this one.
I am sure that your child is wonderful and accomplished and will end up someplace great. Given your financial complexities, it may not be a place that’s currently on your radar,
Kind of depends on how one defines front yard or backyard as it is contiguous and we reside on the entirety of the land.
I found this discussion:
http://talk.qa.collegeconfidential.com/financial-aid-scholarships/1697577-defining-an-investment-farm-for-fafsa-purposes.html.
And this (see question 3): http://cheapscholar.org/2011/02/09/know-your-assets-good-fafsa-questions-answers/
The roughly $64K AGI estimate I’ve come up already includes the $8K sell off; otherwise the AGI would have been around $56K.
NO. If this student is a HS senior in the 2018-2019 academic year, she will start college fall 2019. That will be the 2019-2020 academic year…and that will use 2017 tax year information…not 2016.
So…again I ask…what Ivy net price calculators are giving you an unaffordable family contribution with a sub $65,000 a year income?
Does the other parent work??
Estimated Grant/Gift Aid
helpon Estimated Grant/Gift Aid
Estimated Total Grant/Gift Aid $ 42299$
CategoryCost
Brown Institutional Scholarship $ 42299$
ESTIMATED NET PRICE
helpon ESTIMATED NET PRICE
$ 32583$ Estimated Self Help
helpon Estimated Self Help
Estimated Total Self Help $ 2950$
CategoryCost
Student Work $ 2950$
ESTIMATED REMAINING COST
helpon ESTIMATED REMAINING COST
$ 29633$
It could be the value of your real estate.
Brown looks at equity in primary real estate with a high %age if it’s value.
Does the other parent work? Is anyone self employed?
@thumper1 My bad, sorry for the error. I misread start date of college as application year when I went to the College Board website.
That said, my broader point is that a merit scholarship-based strategy is likely to yield better results than reclassifying the family farm for tax purposes. As those tippy-top scholarships are extremely hard to obtain, some resetting expectations about prestige/price is probably in order.
@farmgirl1961 IIRC, Brown was less generous than some other Ivies in need based calculations. Try Princeton or Stanford for comparison.
Edited to add, take a look at University of Richmond for merit scholarships.
My understanding is that Brown considers 100% of your primary home equity when calculating need based institutional financial aid.
In addition to the above aid for Brown, your kiddo could also take a $5500 Direct Loan in her name.
Something isn’t right. With a $65000 income or so, your family contribution based on income only…would,be far less than $29,000.
@mommdc you are good running the NPCs. What do you think? $65,000 family income and a $29,000 family contribution? Your thoughts?
@farmgirl1961 is that income before taxes? Or after. What is your gross income from 2017?
It could be. Property values in Central Oregon have skyrocketed and we bought our property in 1993. There is a lot of equity there. Saying that, I doubt we could get a loan in that we haven’t been able to do a re-fi. There are two dwellings on the property and no appraiser seems to be able to get a comp. So, yeah, there is equity in the property, but it’s highly unlikely we can access it.
My husband manages the property, which is a full-time job. We were doing some Airbnbs for extra income. There’s a ton of maintenance work and repair to do. He doesn’t have an outside job. We stopped the Airbnbs when we left for the UK. All of that is already included in the AGI.
Is this second, useless dwelling really preventing you from doing anything? If so, have you considered razing it?
You would need $500,000 in equity at 100% use by the schools to have $25,000 or so added to your family contribution. It sounds like that is very possible.
What CAN you pay annually? $10,000? $15,000?
If your daughter got a full tuition merit award someplace, would you be able to pay the room and board costs?
You might want to look at UChicago’s art history program and NPC, she would almost be a full ride at your AGI. Tuition is free < 125k and full ride below 60k AGI.
We can’t raze the other building, nor do we want to. Not sure where our maximum annual payment is, but it is far less than $10K. I will take a look at UChicago’s art history program and NPC. Thanks for the tip CU123.
Someone else here recently got unusual results from Brown’s NPC.
Look at Emory too - an art history PhD friend did her undergrad there. Emory has merit money (some is very competitive) and meet financial need.
Will do, thanks. You’ve all provided me and my daughter with a lot of things to think about.
If your price point is under $10,000 a year, your kid will:
- Need to get accepted at a school that provides generous need based aid.
Or
- Start looking at less competitive schools with significant merit potential
Or
- Commute from home to someplace local.
Remember. She can take a $5500 Direct Loan in her name…so that plus your $10,000 might cover room and board.
And she needs to get a job.
What about parent two? Any chance both of you parents can get part time jobs to help with college costs