<p>I'm a senior in HS looking at, of course, Ivy League schools, as well as superb engineering programs of the likes of Duke and JHU. I'm by no means "rich". go to public high school, drive a 10 year old car, live in a nice enough house, et cetera... my dad is a small town lawyer, and my mom basically works for him. I'd say our annual income is in the 80-120k range, depending on the amount of law-breaking that occurs in my town each year (haha).. </p>
<p>I don't know tooooo much about aid at the big time ivies, but i know it's pretty substantial. I've seen the charts that show the expected family contributions for select income ranges, and i'm pretty sure i'd fall into the roughly 10-15k contribution per year range..
but the catch is that my family owns a substantial amount of real estate. around 5 properties throughout the town. nothing nice. in fact, it's all terribly shabby. lol</p>
<p>As you all know, the real estate market is, well, ****, to put it frankly. This understood, will my family's assets including the houses we own be frowned upon if i'm being considered for aid at, say, yale?</p>
<p>So,
our income = 80 - 120k a year
our assets = ton of money in houses
our debt = astronomical?</p>
<p>Please, if you've made it all the way through my poorly written plea for information, let me know how this kind of thing works.</p>
<p>Yes, they consider equity. Equity is the value of property minus debt. Also, they consider income-- income includes income from work, investments (including rents) and even non-taxable income. </p>
<p>You need to ask your parents to run a calculator and see what the IM (institutional method) estimates. Based on the information you provided here, I doubt you are in the $10K-$15K range. </p>
<p>Even though some top colleges have incentive programs for middle income families, they are not including people with substantial equity and additional investment income.</p>
<p>If you’re lucky enough to get into Yale, you might jut pay $15k, but at most schools on $120k, you’d pay a lot more. The equity in the houses will be “taxed” at 5.6%.</p>
<p>If the debt is mortgages against the properties then it will reduce the reportable value of the properties. But the net value of the properties will affect your EFC and your financial aid. Even schools that give generous aid to higher incomes state that it is for those with “average” assets. High assets will be taken into account.</p>
<p>Also, based on posts I have seen on CC, if the family income is from self employed income and/or rental income this may be treated differently by some schools than regular earned income. For instance some schools may not allow some expenses that are allowed on the tax return. Does the income you mention include rental income from the properties? That is also taken into account.</p>
<p>Really it is hard to tell until you apply for aid.</p>
<p>Swimcatmom is right that no one can know for sure what schools are going to do with your assets and such.</p>
<p>So, apply to a few and see what happens.</p>
<p>HOWEVER, You should also apply to a couple of schools that will give you big assured merit for your stats…just in case the top schools expect you to pay too much or you don’t get accepted.</p>
<p>you need a couple of “financial safety schools” that you know FOR SURE will be affordable because of ASSURED SCHOLARSHIPS or family funds.</p>
<p>Oh yeah, I’m definitely aware of the necessity for a “financial fallback”. I’ve noticed a lot of kids on here apply EXCLUSIVELY to astronomically expensive schools and it blows my mind. Indiana University is my fallback; I’ve already secured more than full tuition there (selective scholarships are pending). </p>
<p>I’ve even heard stories, or rather, first person accounts of situations in which more expensive schools compete with public schools for students. The story I heard concluded in a student getting a full ride and stipend to Vanderbilt engineering over Purdue’s engineering program. And the kid just had a 32 ACT or something not so incredible. Feasible?</p>
<p>My parents would really appreciate it if i kept their costs under 15k, but they could probably make 20k happen. </p>
<p>I’d say my top (pricey) choices are Yale, Columbia, Princeton, Duke, and Johns Hopkins. in no particular order.</p>
<p>The story I heard concluded in a student getting a full ride and stipend to Vanderbilt engineering over Purdue’s engineering program. And the kid just had a 32 ACT or something not so incredible. Feasible?</p>
<p>Very unlikely.</p>
<p>My nephew is at Vandy with higher stats and got nothing. LOL</p>
<p>I imagine that to get a full ride at Vandy you’d need an ACT 35/36 and perfect grades.</p>
<p>Or, maybe the kid got a full ride because he’s low income…if so, then his stats didn’t matter.</p>
<p>When you wrote what your family’s income was, did you include rentals? </p>
<p>That 10% with schools is for average assets. If your family has substantial equity in additional property, you can expect to pay much more than 10% even at the top schools.</p>
<p>The 5 real estate properties your family owns WILL be considered an asset for financial aid purposes. The full equity in those will be counted and assessed at about 5.6% Most families do NOT have five additional real estate properties, so I would doubt that your family will be in the “and typical assets” category. They have more assets than typical in my opinion.</p>
<p>In addition, if there is rental money coming from those properties, that money is added as income to your family’s income. So your actual income may be higher than what your dad (and mom) earn for financial aid calculation purposes.</p>
<p>And lastly, self employed at some schools find that things allowed as deductions for tax purposes are added back in as income at some schools. It varies from place to place.</p>
<p>I didn’t see any schools on your list that are within the $20K price range your parents have set. Do you plan to apply to any instate public universities in your state? You might want to consider this just in case the money doesn’t flow from the other schools on your list.</p>
<p>Depreciation Expense & Vehicle Expense is usually added back in on Self-Employed individuals as well by the CSS Profile schools, along with other expenses they deem to be not true expenses. </p>
<p>OP, maybe you should sit down with your parents & do the EFC Calculator on the Collegeboard’s website & choose “FM” and “IM” (Federal Methodology) and (Institutional Methodology) & see what it calculates. You could use estimated numbers for 2010 or use their 2009 Tax Returns, if they feel income will be similiar. It might help you know what you are up against & give you some ball park figures! Good Luck!</p>
Of course, only to the extent that it exceeds the expenses associated with them - IOW line 17 from the 1040, which comes from the Schedule E forms.</p>
<p>Income from rental properties is added in as INCOME. That happens for all schools as far as I can tell…whether FAFSA also Profile. I think what Mom2collegekids might be suggesting is that Profile schools might actually assess these rental property assets at MORE than 5.6%…that is certainly possible. Profile schools can uses this data any way they choose.</p>
<p>Rental incomes have TWO impacts on your financial aid…one as an asset, and second as increased income if they generate rental income.</p>
<p>Remember, MOST families do not own rental properties. Most do not have income from additional real estate investments (which rental properties are considered). </p>
<p>So…to the OP…did you include the value of your rental properties, AND did you include generated rental income? There is a schedule dealing with rental properties on your parents’ tax return. It deals with money earned vs. costs. BUT if these properties are viewed as a “business” keep in mind that the schools might very well add back in “costs” that your family put as deductions on these rental properties.</p>
<p>Here’s my issue with the way that everyone claims our assets will be assessed:</p>
<p>Our dealings in real estate aren’t so much of a luxury as they are a pest. My mom works harder than i can imagine. She works for my dad during the day, and if she has time, she’s either cleaning up from the low-life tenants that leave the houses in squalor as they are evicted, or in the process of evicting tenants. I know for a fact that we make NO money in the process. By this, I mean that we NET negative amounts each month. Fees exceed rental income by far. It’s all just a sucking chest wound at this point; a lapse in judgment made at the peak of the housing bubble. So if income from the properties is taken into account, are the necessary expenditures into the properties also taken into account?</p>
<p>I’ve been talking to my dad about this issue, and he said he’d be willing to sell some stuff if he had to, but a premature sell on a property (the market is still god awful, property has depreciated, we’d loose money) would hit my family pretty hard. </p>
<p>I’m not sure if anything I said means anything, but if nothing else, it serves to fill you in more accurately.</p>
<p>Necessary expenditures for rental properties ARE considered. But what YOU think is necessary, and what the colleges find “necessary” might not align. Some of those “necessary expenses” may be added back in as income for financial aid purposes.</p>
<p>I’m not a business person, but I always wonder why someone would own any business that is losing money month after month…but that’s just my opinion.</p>
<p>The most important thing…find out what your parents are willing to contribute to your college education and find at least one school that is within their dollar requirement. You may get some aid and you may not…it’s hard to tell. You DO have some assets and they will be counted one way or another.</p>
<p>The property value should be reported as an investment. The worth is the current market price less any mortgage owed. That is also the amount one could theoretically borrow against the property (for such things as college tuition). If the net worth is low, owning the property will not affect you as much as you think. If the net worth is high, then your family has options.</p>