I’ve read most of the discussions here about the CSS Profile and being self employed. I’m really just wanting to know how one specific expense is treated here. I know generally what gets added back in.
I’m looking at an expansion of my business that would require taking out a substantial loan. Does anyone have experience with interest payments getting added back in for the CSS Profile? I assume that any repayment of principal is counted as income even though I don’t have access to the money. I just want to make sure that the interest won’t get added back in too.
I know that the schools can treat this differently, but I’m trying to get a general idea. If I colleges add back in interest expenses, then this deal doesn’t make a lot of sense for me. Thanks.
I’m a bit concerned about how it will affect D21. So who knows who to call for her. I was just wondering if anyone has had experience, to try to get a general sense of how most schools handle it.
It’s not the profile, it is how each college handles the information. The CSS collects information, but does not yield an EFC. A self-employed parent generally has to fill out the Business supplement, and that has a breakdown of income/expenses, so you would report the interest you were paying on the business loan in on the appropriate line on the form… but no judgment or determination is made.
Colleges will take that information and often also request supplemental info, such as tax returns or a P&L statement. And then each one has its own policies as to how they review and make determinations.
Colleges also can and do ask questions about expenses-- questions like, what the loan was for and when it was taken out. After all, from their point of view, why should they fund the business of the parents of their students?
Honestly, I think you have to prioritize and make decisions based on the assumption that you cannot count on any particular level of financial aid. For starters, there is no guarantee your daughter will be admitted to a college that meets full need in any event.
This doesn’t mean not to take the business loan. Maybe the best decision for you happens to be to focus on your business and rethink your daughter’s college search strategy; for example, to focus on schools awarding merit aid rather than need-based aid. Because the truth is that you could decide to forego the loan and the opportunity to expand your business, and still find that your daughter fails to get the need-based aid that you hope for or expect.
But if you have to ask the question, for purposes of planning, assume the answer is yes: yes, the money will be added back in. Because you can’t possibly assume the answer is no without knowing yet what colleges your daughter is applying to, much less where she may be accepted.
@dadof4kids I’d call the FA office at one of HYP and also a less generous meets full need school. Just tell them you’re working on a college list and want to make sure the NPC is accurate for you. I’ve done this on a few different business related issues and the answers have been very clear (and haven’t matched conventional wisdom here on CC). I think the clarity or lack of it will give you an idea of how certain you can be. Business structure might matter on this also…S Corp vs other.
Thanks. When it comes time for the college list I probably will need to do this at a bunch of schools. I have a feeling that I will get widely varying answers to a few things.
One is the value of my business. The industry standard valuation technique gives me a decent value. But the reality of my area is that I would be lucky to sell it for 10% of that amount.