I have a junior who will be applying to colleges this fall and have no idea how to handle the financial aid question on the common application. I have a job with a salary of $180k. My husband is a real estate developer. Some years he makes no money and some years he makes way more than me. In 2013 our AGI was $58k but in 2014 it $498k.
Four questions:
How many years of tax returns do the financial aid applications require?
If we are going to begin the process this fall, will the application require our 2015 taxes, which won’t be ready until after the February deadline?
What if we don’t qualify the first year? Can we get financial aid in subsequent years?
Should I even bother checking the financial aid box this fall?
Thanks all, as I am just beginning this daunting process.
Please clarify. If your salary income is $180,000 a year, how would your AGI be $58,000.
The colleges will request tax returns, and the number of years of returns will vary by college. We had to send two years worth for both of our kids to some schools, and only one to others.
The school year 2016-2017 will use the tax year 2015 to determine your eligibility for need based aid.
Re: tax filing…and financial aid filing. You can file both the fafsa and the Profile before you complete your taxes using your very best estimates for the 2015 tax year…and then update ASAP when your taxes are completed to reflect the NU,bears on your tax forms.
Need based aid is awarded annually…and you apply annually. If your financial situation changes, your need based aid might change as well. BUT keep in mind, most schools do NOT meet full need, so a reduction in your income might not net you any additional need based aid.
Your choice. Some schools do,award need based aid with higher incomes. Also some schools require the financial aid application forms even for merit award consideration.
Also there are a small number of colleges that do place restrictions on future years in terms of applying for institutional aid if you do not do so as an incoming freshman. Just a small number. But you should check this for any college of interest.
@thumper1 the reason for the low AGI in 2013 is because my husband is a real estate developer. Usually, one year he builds a house (in which case he makes no money and just draws from a construction loan – hence the major deductions) and the next year he sells it, making a profit. It makes it looks like he made a ton of money that year but there’s no way to explain, without looking at multiple years that, on average, he makes about $200k.
@thumper1 I have no idea what to expect. That’s what I am asking! We have put some money aside in the kids’ 529 accounts but not enough for all 4 years. The next house that sells, we will, though, because it doesn’t sound hopeful.
No you will not get financial aid in all probability, but depending on your kiddos grades and test scores if you drop in college selectivity he/she may garner some tuition discounting in the form of merit money. If I were in your shoes I would sit down and figure out an average amount of you can spend over each year for all four years and not look at a single year.
<<< @thumper1 I have no idea what to expect. That’s what I am asking! We have put some money aside in the kids’ 529 accounts but not enough for all 4 years. The next house that sells, we will, though, because it doesn’t sound hopeful.
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Your income will be too high for aid, and since the variances are due to “business deductions,” etc, the CSS schools are going to add many of those back in.
Since your DD will be a humanities major with law school goals, and you’ve mentioned the need to “borrow whatever is needed” to pay for undergrad, then you really should encourage her to also look at schools where her stats will get lots of merit so that you can help pay for law school.
@zoosermom and others here are pretty savvy about the grim employment prospects of newish lawyers, and how “law school debt” can be a serious burden for a youngish lawyer.
I have a cousin whose husband is an equity-partner at a very successful law firm. Their son passed the bar a year ago (no debt, parents paid), and he was able to get a job at dad’s firm, but they have said that his salary would not have been high enough to support himself and pay back law school debt.
@mom2collegekids, thanks for the info. My BIL and SIL are both lawyers and, in their late 30s, still paying off law school debt. It’s quite ridiculous, I know. My husband says he will pay for law school if the kiddo goes to state school. With the discipline issue, I don’t know how picky we can be, though…
@NewWaveMom I know you have concerns mentioned in your previous thread. If I were to guess, the publics that are more likely going to offer merit would be less likely to be concerned about that discipline issue since it was a one-off.
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My husband says he will pay for law school if the kiddo goes to state school.
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I’m guessing he means either a low cost instate school or an OOS public with large merit? Some OOS publics (without merit) will cost almost as much as privates. Berkeley, UCLA, and UMich are all over $50k per year for OOS students.
@mom2collegekids, looks like we’ll have to cross our fingers for UVA or suck it up with Wisconsin, if Cornell or some of the other reaches don’t pan out. There doesn’t seem to be any point to applying to UMich, if tuition is so high. I just looked up acceptance rates for OOS. Just as tough as Cornell, Vanderbilt, etc. The blended acceptance rates are misleading … although I wonder if bigger, public schools will have a different outlook on discipline issues than the smaller LACs?
You might need to cross your fingers with Wisconsin as well. And the school certainly isn’t going to give you the money to pay out of state costs of attendance…about $45,000 for the current academic year.
Have you discussed colleges with your school counselor? You might want to consider doing so. Your daughter needs more safeties on her list than reaches. Her application has fine stats, but she has a hurdle she will need to jump.
Too late to edit…there are thousands of well qualified students applying to all of the school’s you have mentioned who did not have the disciplinary action your student had…thus the reason for a thoughtful list.
Forgetting your husband’s boon years, your salary alone puts you in a dicey category. It’s higher than even the Harvard cutoff. Plus, when families at that level get aid, the small print is lots of kids, several in college at the same time. You can run NPCs, but his P&L will throw that off. They can also reasonably expect that, in 14, you set aside funds.
In our case, every college asked for two years of tax returns, then a projection for the next year.
Good to know, @lookingforward. I’ll be sure to put away at least two years for each kid in the 529 this summer. That way, we can pay the tuition when there is cashflow and can draw upon the 529 when there isn’t. Thanks again for the information.