I’m a single child right now living in a very wealthy neighborhood. My family got to this point because my parents used to own a nail salon in Manhattan and made about $100,000 a year for three years. However, my parents sold that store for a little less than a $1 million because there was an impending sue from one of my parents’ workers (I won’t go into details).
So my parents became unemployed for a year and eventually bought a new store closer to home. It is extremely busy on the weekend (with me going to help at the reception usually about once a month). However, we only make about $30,000 a year as of right now.
I am currently part of the free lunch program at my school (usually qualify if your family makes less than the national average income). So I’m wondering, am I considered to be “poor” in college admissions? Will I receive more financial aid than a normal person in my neighborhood (people usually make about $80,000 around my area).
We have no way to know if you will get more financial aid. That depends on the need based policies if the colleges to which you apply.
Your parents own a business. At the miore generous colleges, you would need to complete a Profile, and the value of the business would be taken into consideration.
For the FAFSA, if your income is low enough, and you qualify for free lunch, you would possibly qualify for the simplified needs test whereby your assets would not be counted. Or maybe an auto $0 EFC. If you got that, the only guaranteed aid you would get would be a $5500 Loan, and whatever portion of the Pell Grant you were entitled to…Max is $6095.
However, there is no simplified needs test for the Profile.
Where is the $1,000,000 they got when they sold the business?
Does your family own your residence? Rent? How are they laying the bills to live in a wealthy neighborhood in Manhattan on $30,000 a year income.
OP - financial aid depends on financial resources, which means both income and assets. Your parents tax return is the first form of documentation - the amount they made last year (or your Sophomore/ Junior year) will be the year considered first. FA offices may also ask about assets, bank account balances and business ownership. They may ask for the business’s tax returns. All these things are necessary for the office to determine what they think your parents and you can afford. Based on what you are saying, I think you won’t be considered “poor”.
In other threads, you indicate you are a HS junior. That being the case, you won’t start college until fall 2020. When the time comes, you will file the 2020-2021 FAFSA which will become available on October 1 2019. You will use 2018 tax year information…so the income from 2018…all of it (including tips) from 2018 is what will go on the forms. Assets will be reported as of the day you file the FAFSA and Profile forms.
? Extremely busy, but only making $30k per year now?? Does that sound right? That would mean about $600 a week…contrasting to their past of earning $2k per week.
Where is the $1,000,000 your parents got from the sale? How much did they spend (in cash) on the new business?
$80,000 may appear “very wealthy” to someone with $30,000, but “poor” to a typical forum poster complaining about not getting financial aid on $250,000.
@thumper1 The money we got were spent on our trip to Europe the following year and also opening a new store near the area. The rest is on our lifestyle needs but we’ve used that money solely for two years (opened a store this year).
We own our residence (our house was valued at about $550,000) and we live on Long Island, not Manhattan (had to make that clear)
@moms2collegekids I asked my parents why our income wasn’t that high and they told me that they would rather pay off all their loans quickly so we can eventually have a greater gain in the future (they did that in Manhattan too and it worked)
Also, our new store is in Long Island now, not known to be as busy as Manhattan. The staff is about half of what it was in Manhattan because we don’t receive as many customers (LI only gets locals as Manhattan may get people from all over the country) So we’re extremely busy because of the lack of many workers and constant surges of people (usually before big holidays or celebrations like prom). In addition, I only go sometimes (like 2-3 times a week). I don’t go every SINGLE day if that is what you thought.
Also the $80,000 is incorporating EVERYONE in my neighborhood. There are some people that live in $3 million dollar houses and there are some people that live in basements of other people’s homes. This usually happens because of our school district being one of the top districts in the nation.
What’s their gross income? If the $30k is what they have left after they pay their expenses, that’s the net income. Colleges will want to know the gross.
I don’t know enough about TAP and the Excelsior scholarship to know whether a business owner with a net income of $30,000 would qualify. Perhaps @sybbie719 can chime in.
But really…what is their income from this business? Is the $30,000 what they say they have to live on after paying their business loan or whatever? That’s a lot different than having a higher actual income before paying that bill…and your other bills.
What are your SAT or ACT scores? And what is your GPA?
Where exactly are you hoping to go to college?
From what I can tell, there are several NY public colleges on Long Island. Which one is within commuting distance of your house?
Have you discussed college finances with your parents? What are they willing to pay each year?
Checking for clarity…your parents were unemployed with a potential lawsuit, and your family took a vacation to Europe? And in one year, your family spent $1,000,000 or so to by a business and on your “lifestyle”?
You need to talk to them ASAP about how much they will pay for college annually. This is a choice they will either do…or not do…and you need to know.
Oh…and free advice…if you are working for your parents, be honest. Have them pay you as an employee. Have them issue you a w-2 form. Otherwise, keep track of this income yourself because if it’s over $400 in a year, you would need to consider yourself self employed, and file your taxes accordingly. @BelknapPoint would be better at elaborating on this than me.
On some other threads you mention STEM major. Please keep in mind that some colleges DO require the CSS Profile for need based aid consideration. That form requires disclosing the value of the family business as well as your primary residence. And your tax returns will be a required submission at a lot of places, including the business supplement form.
What year are you in high school?
You really need to talk to your parents about college costs…now.
I’m not here to bash your parents. But the other posters (and myself) are somewhat surprised that your parents had a $1MM windfall and decided to spend most of it. It probably would have been better to put that money into a 529 plan so that it can grow tax free, and help fund your education.
Although your parents income is fairly low, all of their assets will be considered before a decision on how much financial aid you will receive. I would suggest that you run a Net Price Calculator on the colleges that you’re interested in. Look on the college website and then plug in the numbers. The final estimated cost is usually pretty close to what you would receive, if accepted. My guess is that your parents don’t want to spend $40K out of pocket each year to fund your education. If this is the case, have a serious discussion with your parents right now about how much they are willing to pay.
If the difference is large between what your parents will pay and the NPC, then you’ll have to come up with the money yourself. The max you can take as a loan on your own is about $5K per year. So you’ll either have to find an affordable college, or get some type of outside funding.
Yes, we do need more answers from OP re: financial picture, yet the harsh judgement surrounding the proceeds from the sale of the business is unfair. OP is a teenager. And although we don’t know the details, it does sound like the parents invested some portion of the proceeds in a new business, which certainly seems reasonable. Whether or not they spent some of it on traveling or invested some of it for OP’s education is not for us to judge, it is what it is.
Once OP gets back with the answers to some of the questions posters have asked, the CC community can then recommend some ways OP can best proceed forward.
Yes, bought a store. Travelled. And a house, now valued at about 550k. Unknown: whether they saved anything for his college costs. We aren’t criticizing OP but trying to find out if his parents’ assets make him poor for college. Or if they expect a college to endorse their choices. Traditionally, on CC, we explain discretionary choices aren’t automatically going to yield high need based fin aid.
Whst colleges? What assets remain? Where do your parents expect you to go to college?