Savings

Paying for College
1

<p>Okay - is anyone else in a similar situation?</p>

<p>My parents make a decent amount. We're upper middle class. However, we do not live in an inexpensive area and my two older brothers, though they're over 18, both live at home. One attends a few classes at a community college (which we can't put on forms because I guess he's not degree-seeking) and works only a few days a week because he also plays hockey on a junior team and that's the only way he'd go to college is if he got a scholarship to play hockey somewhere. That costs a LOT per year. </p>

<p>Should this situation be explained somehow to colleges?</p>

<p>I just feel really lost in this financial aid business - my parents have no college money for me. Zero. They'll contribute some, but I have NO savings for this, and I don't really know how this is all going to roll out. Will the fact that I have no savings mean that I'm out of luck because (ON PAPER) it looks as though my parents have enough, or will the lack of savings help in being granted some need-based aid?</p>

<p>Any insight would be helpful. My parents have left this entire college process up to me, and they'll give me the information that I need about finances, but I just need an idea of what I should be expecting...</p>

2

<p>After you file FAFSA, you will receive a SAR (Student Aid Report) which includes your EFC (estimated family contribution). A family’s EFC is a sum of a percentage of four factors: parent’s income, student’s income, parent’s assets, student’s assets. The largest portion of your EFC is, in most cases, a percentage of your parent’s income (more specifically your parents adjusted gross income (AGI). As to parent’s/ student’s income, FAFSA looks at adjusted gross income (AGI) from 1040’s from the previous tax year. For example, for school year 2006/07, FAFSA looks at parent’s/student’s AGI from 2005. So if you're applying for 2006/2007 for need based aid, whatever your parents can do to reduce their AGI on their 2005 tax return can help you.</p>

<p>I interpret that you have NO savings to mean that neither your parents nor you personally have saved any money (liquid assets like cash, CD’s, etc) for college. The bad news is that it appears that your family has no money to contribute at least from assets. The good news is that this will help somewhat in getting need based aid as two of the above factors (parents/student’s assets) that are used to determine your EFC are off the table. Keep in mind that if your parents own a home, any equity will also be off the table when it comes to determining your EFC if you only apply to schools that require FAFSA. However, if you apply to schools that in addition to FAFSA require the CSS Profile, your parents home equity may/may not be used in determining your EFC. </p>

<p>If I were you, I’d keep trying to make yourself look as academically strong as possible. In addition, besides applying to a couple of reach schools, I’d also apply to some safety schools (safety both from an admission standpoint, but also a financial standpoint). Once accepted, see what aid package they offer. You can always say no. Even if parents, like yours, make a decent amount of money, it can be very expensive just to feed, clothe and house a family of 5 in today’s world, much less save for college. Be realistic. Don’t forget that schools will expect you to work and contribute. </p>

<p>As far as your brother and his hockey, it probably won’t make much difference to an aid officer. If it was a medical expense, or if your family lived in an area where the cost of feeding, housing and clothing was exceptionally high, maybe it would help. I don’t think the cost of playing hockey, despite the reason, will sway an aid officer. You can explain it to an aid officer. The worst he’ll say is no. Good luck.</p>

3

<p>Well, we're actually a family of six... I don't know if the number five was referring to my situation or not. I guess my real question was with the hockey example was that my parents fully support my brother financially even though he is over 18. I have two brothers over 18. Are they automatically excluded from these financial aid forms because of their age? Or does it depend on the school?</p>

<p>Thanks for answering, by the way.</p>

4

<p>You only mentioned that you had two brothers, so I assumed that you were a family of 5. Sorry.</p>

<p>FAFSA asks for the number of exemptions that your parents claimed on the relevant tax year. (Remember, if you are applying for aid for 2006/2007, I’m referring to 2005’s 1040).</p>

<p>To be claimed as a dependent on your parents 1040, the IRS uses 5 tests (dependency tests). I believe that to be claimed as a dependent, all the tests must be met. If your brothers meet the tests and are claimed on your parents 1040, then they are included on FAFSA. I'm pretty certain that the number of exemptions on the CSS Profile has to match with what is on FAFSA. Consult with your tax advisor or IRS Publication 501.</p>