Specific Questions re: completing the CSS Profile

Paying for College
1

<p>Crunch time!!!</p>

<p>This is our first time completing the CSS Profile (and hopefully the last!), and I have a coupe questions that I hope someone can help answer..........</p>

<p>(1) When determining CURRENT HOME VALUE (PA-130A), what should we use as a guideline? What flyers from local realtors say our home's value range is? Zillow? Comparable sales? Other? Figures we've seen have had a range from low to high end of up to $50,000.... and that's just within a single estimate (like Zillow) vs between estimates! I don't want to come in too high or too low when completing the CSS profile, and the range is ridiculous!
Any suggestions?</p>

<p>(2) What is the point of questions PI-230A and SI-160VW, which deal with "cash from others"? What should it matter if or where any money came from, as long as it has already been reflected in the parents' and/or student's asset balances in other questions?
Say, for example, the student has $3,000 in assets, $500 of which was a graduation gift, and the parents have $80,000 in assets, $10,000 of which was an anniversary gift. If the $3,000 and $80,000 have already been identified, why indicate where $10,500 of it came from? Is it to identify money that might be "unusual", and not expected every year (and thus be in the student's/parents' favor to indicate as such?), or some other reason? How deeply should one go back over the past year to identify the source and total amount of any such cash gifts? </p>

<p>Thanks in advance for any help with the above questions!</p>

2

<p>The “Paying for College Without Going Broke” book by Kalman Chany says you should put the amount you could get for your home if you had to sell it RIGHT AWAY, minus the cost of real estate commissions, etc.</p>

<p>See previous posts I’ve made on the question of home value:
<a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/1016853-link-10-13-2010-efc-formula-guide-2011-2012-a-2.html#post11359051[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/1016853-link-10-13-2010-efc-formula-guide-2011-2012-a-2.html#post11359051&lt;/a&gt; (post #20)</p>

<p><a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/1071882-home-value-2.html#post11855175[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/1071882-home-value-2.html#post11855175&lt;/a&gt; (#17)</p>

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<p>Here is the excerpt from the current edition of Kalman Chany’s book; (p. 92)</p>

<p>“The forms are asking for the value of the property if you had to sell it right this minute, today - not what you would get for it if you had a leisurely six months to find a buyer. If you had to sell it in a hurry - at firesale prices - how much is it worth? Remember that there are always attendant costs when you sell a property: painting and remodeling, possible early payment penalties for liquidating your mortgage, real estate agent’s commission. If the colleges want to know what your real estate is worth, these costs should be taken into account. Be realistic.”</p>

4

<p>Thanks for the info & links!</p>

<p>This process is INSANE!!</p>

<p>I ended up looking at both Zillow & Homegain for both our home & neighboring homes to get a feel of their “values” vs our relative home/land sizes, amenities, prior sales, etc to get a feel for where we fit in.</p>

<p>I also looked at latest assessment values for same.</p>

<p>I had to discount our re-financing appraisal from 2011, because the appraiser appears to have both used non-comparable homes for determining our value (the others were all in a gated golf community vs our “normal” development), and came back with a number 25% higher than even the current top end of Zillow’s range! It appears she was doing what she could to make sure we met the necessary percentages to do the refi…</p>

<p>I also had to discount our homeowner’s insurance value, as it is almost DOUBLE the other estimates’ ranges (for replacement & contents, etc, I guess…).</p>

<p>I had to go with what I see as a reasonable aproximation, based on actual neighborhood sales & comparables, when all was said & done. I have my calculations to support the figures, but can always sit down with someone from the 1 school that needs our CSS Profile (and which hasn’t even made an acceptance determination yet!!) to fine-tune it if necessary.</p>

<p>In the meantime, I have a follow-up question…</p>

<p>While I understand & appreciate Momcat2’s info, aren’t they asking for the “value” of the home vs what I would net out of it after repairs, settlement & commission fees, etc? I figure repairs in the $30k range to update it for sale, and another $20-25k in settlement, commissions, etc. - - - do the colleges using the CSS Profile understand & accept that deduction when calculating home value? </p>

<p>Thaks again for your help!</p>

<p>P.S. Anyone have an answer for my other question re: “cash gifts”, or know where I can read more about it as it applies to reporting any on the CSS Profile? Thx!</p>

5

<p>Cash gifts would be money from someone who pays mortgage, utilities, food or other expenses for the household, but isn’t a member of the household. Cash gifts would also include an money that have been received and already spent.</p>

<p>For example, if a grandparent pays for private school tuition for a child, or an uncle pays off a credit card debt owed by a member of the household, then those amounts would be reported as a cash gift. </p>

<p>If the gift has already been accounted for (like a balance in a savings account), then the amount doesn’t need to reported again.</p>

6

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<p>I’m not an accountant, and I’m not an expert on Profile either, but that seems odd to me. A gift is income that isn’t taxed. Whether it’s been spent already or is still sitting in a savings account wouldn’t change the fact that it was received last year . . . and, it would seem to me, should be accounted for as gift income.</p>

7

<p>This cash gift question confuses the heck out of me too. If you look at the student help section, it says that a cash gift to a student should not be reported as such if it is already reflected in the student’s assets. Simple enough. In the parent section, you are warned not to double-report the money, but the explanation is not as clear. I think WayOutWest and dodgersmom’s interpretations are both reasonable. </p>

<p>And I don’t think Kalman Chany addresses this one either.</p>

8

<p>That’s where I get confused…</p>

<p>If we already provide both our current & prior & future(?) sources of income, as well as our asset balances, what role does providing any gift $ totals play in CSS-Profile-related college financial aid calculations?</p>

<p>Does a college look and say “they have $xxx in assets, but $yyy of it looks to have come from cash gifts & might not be repeated in the future, so let’s not assume they’ll get/have every year when determining financial aid package.”?</p>

<p>Or do they say “their taxable income doesn’t fully identify what $ they may have accumulated/available to pay for college, so let’s not be as generous…”</p>

<p>Or something completely different?</p>

<p>Just HOW deep must one go to identify every single birthday, wedding, anniversary, graduation, etc cash gift over the past year?</p>

<p>And does it make a difference whether it was saved in assets to cover future expenses (like a trip or car or college) vs already spent on everyday bills, a trip or car, etc, which in many cases does not show up in the CSS (expenses & car values, for example, don’t show up in our version)…? </p>

<p>Just trying to get a feel for what/how should report, and what impact any $ identified in that category has on overall processing/determination.</p>

<p>Is there any book or other that explains this?</p>

<p>Thx!</p>

9

<p>anouilh:</p>

<p>Just saw your response re: instructions. Thx! This would seem to answer whether or not I need include any gift $ on those line if already accounted for in assets. Thx!</p>

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<p>I would go to three different realtors in your area and ask what you can get for your house if you wanted to sell it immediately, like today, and get a written estimate from each and ask for a net figure after the expenses that go into it. Use the average of those three values unless you get one way high out of line, in which case get a 4th and pitch the high one. Then use that number. Keep the paperwork in case you are challenged which I doubt you will be. Most people put too high a value for their home. It usually doesn’t matter because most schools will put a cap of 2.4X income for the home value.</p>

<p>In fact, call up financial aid of your school and find out what cap they use. In that case, you don’t have to be so careful in getting the values. Because you may find you have to give the realtors a little sweetners to get the estimates in writing, like pay them a fee for services. If your annual income is $100K and your school uses the 2.4X rule, the house’s value is maxed out at $240K regardles of what it’s market value is. So going nuts whether you should put down $380K or $420K is a waste of your time.</p>

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<p>UDGrad – it’s clear to me what to do for the student. But if parents have received cash gifts, not so clear to me.</p>

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<p>If you, the parent have gotten large cash gifts during the year that are not reflected in income or assets, they want to know about it. If you bought a house, and Grandmom gave you money towards the down payment, they want to know. If Gramps is paying for the kids’ tuitions, they want to know. If they paid for a family vacation, they want to know. It’s a gray area since it’s Cash, not gifts that they want to know. Money towards your car, they want to know. IF they actually bought you a car, technically no. If it’s a $100 gift card, you can safely leave it out, If it’s a $1000, ummmm, I’d still leave off, but I’d think about it. $10K, you had better include it. </p>

<p>Like a number of questions that are asked, these schools are trying to find out where you are in the need bracket. You might have an income of $100K with assets of the same, and so might another family, but if you have parents that are helping you out and have done so in the past, whereas the other family has not, it puts you behind that person in line. Of course, you, I, none of us know how closely they scrutinize, analyze, evaluate that info, or they may not even pay any attention to it as they rush through the financial aid packages that have to be put together. BUt if you appeal your package, and you are showing generous family support…well, they just are not going to be as sympathetic. </p>

<p>They say FAFSA’s EFC means Every Friggin’ Cent, but it’s really that and more for PROFILE. They even want info they do not use so that they know how much more you have there to tap. If your family has gotten a substantial cash gift from someone, usually a family member, this past year they want to know. They want to know of any money that has crossed through your family and benefited it that isn’t included in your income and is not sitting in your asset accounts. What they do with that number, I don’t know and they are highly unlikely to tell you. Like those pension, 401K, IRA balances, that they say they hardly ever or never have used, but they sure want them there to eyeball.</p>

13

<p>“They want to know of any money that has crossed through your family and benefited it that isn’t included in your income AND is not sitting in your asset accounts.”</p>

<p>So if the money is sitting in my (parental) asset accounts, do I also report it as (parental) income under cash gifts from others? Sorry, I think I’m being horrendously obtuse.</p>

14

<p>No you do not. It’s already accounted for. But if Grandma gave you $10K and you spent it all, they want to know about it. If Grandma gave you $10K and it’s all sitting in your stock account, they already know about it. If Grandma gave you $10K and you spent half and the other half is still there, they want to know about the half that isn’t showing up anywhere in your PROFILE. They know what you have, they know what you made, but they want to know about any money that slips through those nets. I wouldn’t bother reporting anying under $2500, but others might draw the line a bit higher or lower. it’s not something that is likely to come back and bite you in the backside unless it is a big amount even if it is discovered. 5.6%of $10K comes to $560 in aid if that money were sitting in an account. For $1000, we are talking about $56. That is what you would get taken away if you get a complete and total audit type verification process that finds out about it which is highly unlikely to happen.</p>

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<p>Okay, thank you. I just wish they would say that straight out, the way they do in the student section. The fact that the instructions are slightly different in the different sections really throws me off. Obviously. Again, thanks!</p>