<p>Please help me understand, if not out of the kindness of your heart then for the moral reward that accompanies giving! haha</p>
<p>I recently submitted my FAFSA using "estimated" info (my parents' 1040 forms from last year) and received an EFC of 00000 or something along those lines. I'm applying to Vanderbilt, Hamilton, Northwestern, Bowdoin, and Pitt, the former four of which I believe meet 100% of need. Don't worry, I'll be sure to update the FAFSA once my parents file their taxes for 2011. My parents have three rental properties (the net worth of which are around $50000), but this income doesn't really seem to affect the EFC? </p>
<p>I'm just curious, am I to understand that, using this EFC of 0, 100% of my cost of attendance would be met? I am aware that student loans accompany gift aid in the FA packages of several of these schools, but in schools which do not include loans in their packages (Vanderbilt, Bowdoin) would my cost of attendance be at least almost nearly met by the institution? </p>
<p>And in the schools which do provide loans, is there a cutoff to how much of the overall FA can be in loan form? Hopefully they don't say they provide 100% of need and just make 50% loans. </p>
<p>Also, would someone be so kind as to explain how the CSS/Profile works? From what I've gathered it just seems like a privatized version of FAFSA. Does it search solely for scholarships? Oh, and how do private scholarships work for service academies? Since they're already free, what do they do? I've seen their use advertised on the CGA website. </p>
<p>Finally, one last technical thing, my mom recently had to stop working (she's the primary source of income for our household; my dad is self-employed with a negligible but filed income stream) and is currently applying for disability. She is planning on resuming work for the same company when she gets better. Is she a dislocated worker? How would this affect my FAFSA? Positively or negatively o.O</p>
<p>I believe those schools (except Pitt) also require the filing of the CSS Profile as part of their financial aid application process. This looks much more closely at your assets and (and income) than the FAFSA does. Also these schools can use the information on the Profile any way they choose to determine institutional need based awards. I have no idea how they will view those rental properties. Profile schools also ask for the equity in your primary residence. If those rental properties are a “business” you may also find that Profile schools do not allow as many business expenses as you may have on your taxes.</p>
<p>Your $0 EFC will give you the maximum Pell grant of $5400 (I think that is the amount). You will likely get the $3500 in subsidized stafford loans plus an additional $2000 in unsubsidized stafford loans. You may get a Perkins loan. If the schools have SEOG, you may get that. </p>
<p>Institutional aid will be determined by the schools…and if they use the CSS Profile (check to see if they do), the info on that will be used.</p>
<p>Thanks for responding! Yeah I just double-checked, all of my schools require CSS in addition to FAFSA except Pitt. I will try my hands at filling out the CSS right now to get a feel for it. What would qualify a rental property as a “business” in comparison to non-business rentals? I’m not sure what the equity on our house is at the moment but I think it’s valued at 150k and we’ve got around a ~90k mortgage. Are we expected to borrow from the 60k left over on our house? I find that a little disconcerting. </p>
<p>The gov’t subsidy on the Stafford loan means the federal government will pay my interest until I graduate? What is its interest rate, and is it fixed? What about the Perkins loans? </p>
<p>It’s surprising that you came up with an EFC of 0 given an income stream from your father albeit small, 3 rental properties and a mother who just recently quit working unless it was prior to January 2011 causing her to have zero income this past year. Be careful and review your submission carefully with your parents and make sure it is filed out accurately. It could impact your aid if you were audited and there were mistakes. And no, your mother is technically not a dislocated worker.</p>
<p>The profile is a financial aid form for 300 or so of the nation’s selective colleges. It will ask more questions about your assets and financial situation…even what cars your family drives LOL. The colleges will use the information in your FAFSA for distribution of federal grants and loans and the Profile will add to the picture and aid them in distribution of college grants, scholarships, etc. </p>
<p>The rentals have a value (market value minus what is owed on them), they generate cash and they have expenses and generally depreciation associated with them. Unless they are formally organized as a business they are treated as an asset. Many people can account for their rentals and show a paper “loss” against their income on the taxes using depreciation and some of the expenses to offset the income number. The income, however, from the properties will be added back to the income that your family receives from jobs, etc. The value of the rentals is also an asset on the FAFSA. Colleges expect families to pay for college from past savings, current income and future income. How families come up with their “share” of the cost is entirely up to the families. We could not “predict” what your family might do.</p>
<p>Loans can be subsidized or unsubsidized. Subsidized loans do not start accuring interest until the student graduates. Colleges will tell you what amount will be subsidized and what amount wil be unsubsidized. Subsidized are alittle over 3% and Unsubsidized are 6.8% I believe. When you get your finaid letters you will see they are listed separately. Perkins is another federal loan that some colleges have the ability to grant. Perkins is also in the name of the student and the rate is 5% I believe, but you can check all this info at studentaid.ed.gov </p>
<p>SEOG is another smaller grant that is available. Students that are extremely needy and Pell eligible are eligible for consideration. I do not believe SEOG or Perkins are automatically awarded.</p>
<p>Thanks for the information, momofthreeboys! To be fair, my dad’s income was around ~$500 and my mom only made around $16000. Now that you mention it, I think I may have misjudged our rental income. I’ll be sure to double-check that with my folks. I’ve already submitted the FAFSA; can this information be used to audit? These are estimates though, and I think I noted that my parents “will file.”</p>
<p>One third of FAFSA’s are audited. As far as anyone can tell it’s pretty random. When you get your e-mail results from FAFSA sometimes there is an asterick next to your expected family contribution, supposedly that indicates that your FAFSA was chosen for audit. However, not all colleges use those FAFSAs and audit different ones. You do not need to do anything unless one of the colleges specifically contacts you and asks for additional information. The college audits not the federal organizations. You never know. In 6 years of filing FAFSA’s we’ve only been audited once and once we had an asterick but were not audited. When you go in to check filed after they finish the 2011 taxes you’ll have the opportunity to correct if you find any errors. You can make changes pretty much anytime but then you have to resubmit and wait a few says again for the FAFSA to process. Your family should just do your best to be accurate on the FAFSA and your taxes and you’ll be fine. If your EFC is what you say you’ll need very good financial aid packages to be able to attend college. I hope it works out for you.</p>
<p>Make sure you keep track of the financial aid deadlines for each school, as well as the other info they request. The schools that require Profile will most likely also ask for other information from you … such as the 2011 tax returns, including all schedules. My D graduated from Vandy, where we received excellent financial aid. They meet need without loans … and if the school does require a contribution from your family, you can still borrow unsub loans if you need to do so (up to $5500 freshman year).</p>
<p>Realize that your school list includes schools that are very hard to get into … but if you do get accepted, the financial aid package will be sent with the acceptance letter at the Profile schools, in all likelihood. Pitt is different - they don’t meet need. They will probably send your financial aid letter much later than your acceptance letter. Are you in state, and do you think you will qualify for merit there? Make sure you do have a school or two that you know you can afford, just in case.</p>
<p>DO NOT MISS FINANCIAL AID DEADLINES!!! You might miss out on aid if you do. These schools can be strict on deadlines.</p>
<p>I apologize if I missed any questions but yes, I am in-state for Pitt. I think I would qualify for merit there. I’m above the 75% percentile for test-scores at Hamilton and am in the upper 25% range for the other three schools. Yes, I know these are difficult schools to get into but the reason I applied to these schools is TO get financial aid (100% need met) because of my family’s socioeconomic status. Pitt is my safety (LOTS of kids in my school with much lower statistics/EC’s have gotten in) I’ve heard though that Pitt may be stingy with its in-state financial aid. I got a 33 on the ACT if that means anything. SAT Bio: 790 SAT Chem: 700 (not so good I know). </p>
<p>Yeah, I’m asking these questions preemptively in order not to miss deadlines I think most of mine are 2/15 except for Vandy which is 2/5.</p>
<p>*My parents have three rental properties (the net worth of which are around $50000), but this income doesn’t really seem to affect the EFC? </p>
<p>*</p>
<p>???</p>
<p>You have 3 rental properties and their total worth is only $50,000? Or did you leave off a 0???</p>
<p>Yes, you do need to include the income from the rental properties.</p>
<p>Those 4 CSS schools are not going to ignore your parents’ rentals like it seems like FAFSA is doing (if you still qualify to have assets ignored after fixing the rental income mistake). </p>
<p>It does sound like your parents would have a “family contribution” based on CSS Profile, so I hope you get into a “no-loan” school like Vandy so that you can take out a 5500 student loan to put towards that contribution. However, NU, which isn’t fab with aid, would include loans in their FA pkgs and would likely expect a family contribution and that could be a problem.</p>
<p>Hey,
The $50,000 number is correct after mortgage (net worth). They value around ~$120k but have around $70k in mortgage. Know that these properties are in very poor neighborhoods (they’re really my father’s little projects. He likes to fix up dilapidated houses which he buys for >$7k) </p>
<p>I double-checked with my parents, we only receive ~$1200 a year from rental after their individual mortgage payments. </p>
<p>I did submit the FAFSA including income from our rental properties; it just seemed to be have a negligible effect. </p>
<p>Thanks for the support! I feel kinda good for doing these myself. Feels like preparation for being an adult (I don’t file tax returns yet) ;)</p>
<p>Oh, and when the FAFSA or CSS asks if anyone receives SSI or reduced/free lunches, how does one know if they receive SSI? And does “parents receiving free lunches” mean their children receiving free lunches?</p>
<p>It’s possible emerald, especially in the past. We purchased our first home for under $50,000 and were able to mortgage it for $150,000 to fix it up (now this was 16 years ago, but I’m assuming in this depressed housing economy you can pick up houses for less than the assessed value through short sales, people just selling cheap to get out etc.). My H has been “flipping” real estate since before they made TV shows about it LOL although he stopped doing it when the kids came along and we got too busy.</p>
<p>The one thing that strikes me is that the rental income has nothing to do with the value technically…the rental income is just that the cash that the owner gets each month from renting the units. On Schedule C you start with the rental income then start deducting expenses like mortgage, interest, insurance, depreciation, repair, etc. etc. but the income is income. The bottom number you transfer to the 1040 and that number can be a negative number or loss or a positive number which ends up lowering the AGI or raising the AGI. The OP just needs to make sure he is pulling the correct amount on the lines in the tax form into the FAFSA. It’s not too difficult if you are careful and read the instructions. </p>
<p>Most interestingly will be how the Profile schools look at the Schedule C and how they “interpret” the assets for this OP. Profile looks at rentals more like they do small business owners. Our institutional numbers are higher than our FAFSA EFC because I believe private schools add back some things that don’t surface on FAFSA or at least that is how I interpreted the results in my past two sons’s pre-freshman college application cycles. OP when all is said and done you’ll have to return in April and let us know how it all turns out. The nice thing is if the rentals have good cash flow and the OP has a small gap his parents might be able to defer maintenance or repairs to cover a small gap if they aren’t in a break even situation with the mortgage, taxes and insurance, their own living expenses even if it looks on paper like the family has no income at all. It’s robbing Peter to pay Paul but the OP, although still a high need kid for FAFSA schools, is probably in a tenuously slightly better position than a student with 2 parents and no income.</p>
<p>I didn’t realize the bank would write a mortgage to be used to fix it up- since they wouldn’t be able to get that kind of money out of it until it was fixed up- I figured the loan would have to be a personal/business loan instead of a mortgage.</p>
<p>When we have gotten a mortgage for our residence, we weren’t allowed to have it larger than the assessed value- even though we would have liked to have had money for repairing/remodeling.</p>
<p>These are both federal means-tested benefits which have separate and very different application/approval processes. </p>
<p>SSI = Supplemental Security Income. Your disabled parent would have to have applied for this, probably at a social services office, and would certainly know if they receive it as it is a cash assistance program.</p>
<p>Free/Reduced Lunch = School lunch. Your parents wouldn’t be receiving this, though you might be! Answer yes if you turned in the paperwork to your school and were approved.</p>
<p>It only works if the house is assessed at more than the purchase price or if there are specific federal or state funds for repair/renovation that the bank can tap (e.g. 203K mortgage) to bolster the loan and sometimes the owner has to "keep’’ the rental for a specified amount of time and/or maintain it for low-income rentals depending on the source of funds. Mostly though in these types of situations the homes that will qualify are very dilapidated…not something anyone should be living in (although people do).</p>
<p>Hey all,
I got into one of my top schools. The tentative finaid is about ~$53000 +/- $1000 in grants/scholarship/work study. I am taking a govt loan for $2500, but other than that I personally have to contribute $500 as a student EFC. Thanks for all the help! I’m so happy and hope the final reward is similar!</p>
<p>Congratulations but I am concerned your final offer will be a bit less.</p>
<p>It’s surprising that you came up with an EFC of 0 given an income stream from your father albeit small, 3 rental properties and a mother who just recently quit working unless it was prior to January 2011 causing her to have zero income this past year. Be careful and review your submission carefully with your parents and make sure it is filed out accurately. It could impact your aid if you were audited and there were mistakes. And no, your mother is technically not a dislocated worker.</p>
I think most of mine are 2/15 except for Vandy which is 2/5.</p>