Self-Employed Parents: Will this effect my FA Package (Plus other prevailing issues)

<p>I've been in a bit of a hectic case when it comes to paying for college. I was accepted to a prestigious NESAC Liberal Arts College which is recognizable for their generous aid (they meet 100% need--offer only need based aid), however I'm a bit of a pickle as I haven't recieved my package yet because I neglected to send in my parent's taxes early enough. My father had been in business overseas for weeks when financial aid documents were needed so I couldn't ask him for the taxes earlier on. When he came back I hadn't realized that he hadn't even filed his taxes for the 2011 year so we had to wait a couple of weeks until all the paperwork was sent. I'm a bit worried that having to wait for the taxes may have effected my package, but there was nothing I could have done about that. All FA information was sent 2 weeks ago and I should be hearing word of my package in a week and a half. </p>

<p>Anyways, my parents (who are divorced--my father has custody, mother is noncustodial) are both self-employed. My mother makes little to almost no income. I believe after reviewing her taxes this year she make 12,000 (net--not sure of gross but it probably wasn't much higher). My father is a bit more well off, he makes about 110,000 gross income (AGI is about less than 60,000). My father is supporting myself, his stepwife, and my four other siblings (not to mention my 3 other step siblings, but they are paying there own way through college and I'm not sure if they were even mentioned in the taxes. </p>

<p>My EFC is 00000. The school is about 55,000 a year (includes tuition and board) and the average financial aid package is about 38,000. I've been trying to plan out how I might pay for this school. I asked the Student Financial Services of the college if having to wait to send in my taxes after the deadline would effect my aid, she said it probably wouldn't, however I'm still a bit wary they may "run out of funds" (thought only 43% of students even apply for aid at the college so perhaps that might not be the case). If my negligence to send in the taxes won't effect my chances negatively (which I hope), I'm hoping that I may receive around 45,000 in institutional aid (hopefully with grants--they don't allow students to take out more than 4,500 in loans). The remaining 10,000 I'm thinking of paying off with the Federal Pell Grant I was awarded of 5,500 and working of the remaining with a part-time job. Is this a feasible solution? Based on the information that I've given do you believe I can be awarded that much money? Is there information I am missing in my analysis of my information that may effect how much I am given?</p>

<p>Sorry for the excessive monologue. Any help? Please I'm desperate for assistance and guidance.</p>

<p>With income of $110k, and AGI of about $60k, that sounds like your dad takes a LOT of business deductions. If so, a good amount of those deductions may get added back in.</p>

<p>I’m surprised that you have an EFC of 0. Are you sure about that???</p>

<p>Does your stepmom work?</p>

<p>Yes, my father noted that he had a lot of deductions with his business. He filed bankruptcy for one of his businesses (so did my mother when I think about it). Paying of bills has also been a hassle, but he’s told me that he’s paid almost everything off (almost, virtually debt free). Yes, my EFC is 00000, others on CC have also speculated about some inaccuracies with my EFC given my father’s gross income but I assure you all the information is correct.</p>

<p>Yes, my stepmother works with my father in the same business.</p>

<p>It is pretty much impossible to figure out how a PROFile college will view a family business. They do not use EFC as their guide for financial aid. And, yes, depending on the school and circumstances, the money well could be dry for aid unless the school guarantees to meet 100% of need. </p>

<p>Some PROFILE schools include quaified pension plan assets in their calculations; most don’t most of the time. Some give leeway for private k-12 tuition being paid for sibling, most don’t. Some include full value of home equity, some cap it, some don’t count it at all. So you can see the variances there, and with one’s own business the possiblities can be endless. </p>

<p>So the school is the only one that can give you the numbers. Just as a warning, when you are late for ANY reason applying for funds EVER, it is possible you get a big fat ZERO. With FAFSA tying in with the IRS in their retrieval system, anyone applying for financial aid who does not file taxes on time, or even very early could be at a disadvantage in getting the best aid packages from a school. Certain things go very fast and are limited such as SEOG and Perkins. If all the info is not available, a best guess return should be filed and an amended return, 1040x submitted later when the info is complete.</p>

<p>I understand. So if my school guarantees 100% need met does that mean it would be unlikely for my tardiness to submit taxes to effect my aid offer? I also thought that since such a small percentage, less than half (about 40%), ask for aid that there may still be a chance there funds haven’t dried up. I’ve been checking up in the school financial service department and the concern of sending in my taxes late hasn’t turned up.</p>

<p>My parents (divorced) both privately own a day care business which both seem to take in a lot of deductions from the gross income which in result leads to a smaller AGI. Both my parents also filed for bankruptcy on previous businesses last year. My siblings and I have attended public school for all our lives, as well. I’m just worried that the college may end up putting back to many of the deductions into our AGI. We are in no way well off, I’d say were “lower-middle class”.</p>

<p>The school will have to look at the tax documents and make their own decision on how to handle your family business, deductions, bankruptcy. There really isn’t any way to predict how this will be received. The same with your lateness in getting all documents submitted. I don’t know if the 40% of students applying for financial aid is a good sign or not. That gives you the % of those kids who ended up going there and who applied for financial aid. Is the school also need blind for admissions? Meeting 100% of need and being need blind are two separate things. A school that is 100% need blind in admissions AND meets 100% of need, IMO is mor likely not to run out of money than one that is need aware for admissions, but that is just my take and I have no stats on it. </p>

<p>Not that any of this matters, as all that counts is what the school can put together for YOU. Good luck.</p>

<p>Thank you. And no they are not need blind. I’d be greatful if I could be awarded 45,000 ish in mostly grants, then I could pay the rest with a federal grant and part time job. Thanks for all the help.</p>

<p>Have you talked to them about when you might expect an answer on your financial aid. I’m afraid for you because I can’t imagine any college using the institutional method would assign a zero EFC to an $100,000 income earner with an adjusted gross income of $60,000. Somethings feels wrong. It’s past May 1st so if you have a contribution is your family going to be able to help you? Did you get financial aid offers from any other Profile/private colleges so you have something expected in mind? Colleges that use Profile in addition to the federal FAFSA meet need as determined by them…so if for some reason your Federal FAFSA EFC did come out zero (which it wouldn’t at that income level I don’t believe) then your expected family contribution would be as determined by the college. Good luck and do call the finaid office to see when they might have a finaid letter for you, but better have talked to your mom and dad to understand how much money they can actually contribute per year if you haven’t already.</p>

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<p>If your father has custody and supports all the kids, then why did you write this back in December?</p>

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<p>My mother lost custody of myself and my blood siblings this year, when I referred to my step siblings I meant my stepmothers children. Sorry for the confusion. She wasn’t exactly sure how much money she’d make that year the number I put was just a vague estimation (I had heard that Stanford would pay full tuition for families who made less than 60000 and she said that she probably didn’t make anymore than that figure). There’ve been custodial tensions between my parents for a while now. . .</p>

<p>Perhaps my parents may have made a mistake with my FAFSA resulting in an EFC of 00000, however they reviewed it along with our accountant. I don’t see how an EFC of 00000 (or a low figure) seems unlikely with a family of 6 (not including step siblings) making 60,000. That hardly seems like too much. I should be getting my FA package in less than 2 weeks. I’m a bit limited when it comes to backup schools, which is also another issue. Originally I was being recruited by a prestigious D1 college, but things did not work as planned so I ended up scrambling for back ups. I was accepted by 2 small state colleges, haven’t recieved FA info because of the reasons I stated above. Although with state aid and scholarship I shouldn’t have a hard time according them, however I’m really not interested in staying instate, despite my financial circumstances. My parents both say they can help me afford college, although combined I think they might only be able to raise around 10,000 combined</p>

<p>I hope it works out for you. It could, but, yes, it is also possible that the school runs out of funds. That it is not need blind in admissions means that it is on a strict budget with financial aid and they only accept and award what they can afford. There is not as much leeway in such schools, in general. </p>

<p>You absolutely cannot be late with forms when it comes to money. You can get zilch regardless of the reason because once money is gone, IT IS GONE.</p>

<p>Please don’t be upset when the school updates your FAFSA info and your EFC changes to something like $25K or more.</p>

<p>I just don’t see how an EFC of 00000 (or a low figure) seems illogical with a family of 7 (including myself). My younger brothers will be attending college soon as well (14, 16), not to mention two of my step siblings are also attending college at the moment with the youngest graduating high school next year.</p>

<p>It may be possible. With one’s own business, however, it’s really up in the air as to how a college will look the situation. It is also possible to have a zero or low EFC and a very high contribution figure generated by PROFILE, which your school probably uses. PROFILE has a whole other methodology. Hopefully, you have all of your paper work in, and the school can do its calculation and come up with your package. They are the ones who make the calls here.</p>

<p>*I just don’t see how an EFC of 00000 (or a low figure) seems illogical with a family of 7 (including myself). My younger brothers will be attending college soon as well (14, 16), not to mention two of my step siblings are also attending college at the moment with the youngest graduating high school next year.
*</p>

<p>EFC doesn’t care that you have younger siblings that will attending college in the future…they may or may not go to college. FAFSA doesn’t care about that possibility.</p>

<p>as for your step-siblings…you mentioned that you don’t think they were included on your FAFSA. If that’s the case, then their situations don’t matter either.</p>

<p>It sounds like your FAFSA household is your dad, SM, you, and your younger siblings. </p>

<p>Another issue is that you said that your dad’s income is from a Day Care Center that he owns? I presume that it is in the US? Is that right? </p>

<p>In another thread, you mention that your dad was overseas for business reasons. Well, that wouldn’t be for the Day Care…so he must have some other business dealings. Where is that being reported? </p>

<p>Anyway…it’s likely that some of those business deductions will get added back in at your CSS school. Self-employed business owners often find that CSS schools add back in some deductions as income.</p>

<p>Oh, I see. My father on occasions leaves for Africa selling and trading certain appliances, but I don’t think it’s anything that is reported in taxes.</p>

<p>Just received my FA Award Letter in the mail . . .</p>

<p>Cost of Attendance:
Comprehensive Fee: $ 57,350
Estimated Books and Supplies: $ 800
Estimated Travel and Personal: $ 1,550
Total: $ 59,700</p>

<p>Calculated Family Contribution:
Parent Contribution: $ 4,962
Student Contribution: $ 1,800
Total: $ 6,762</p>

<p>Financial Need (Cost Minus Family Contribution): $52,938</p>

<p>Financial Aid Award (Full Year):<br>
College Scholarship: $ 51,238
Student Employment: $1,700</p>

<p>Total: $52,938</p>

<p>Such a beautiful and generous package. I guess all the worry was pointless. Thanks for all the feedback everyone.</p>