Hi i have been wanting to creat an LLC for dropshipping for a while now. Now I have the ability to create the business and I’m wanting to so bad. The other only thing that I’m concerned about is I don’t want to affect my fasfa/financial aide already sent up. My parents are also on the fasfa so I don’t want them to be affected at all. Being hypothetical, if I made over 50k or lower than 10k, would this affect my fasfa at all?
Thank you.
Look up the FAFSA formula for student income. You get an allowance of about $6600–changes each year, and then half of any income over that is assessed at 50% towards you EFC. So you would be expected to contribute about $1700 of a $10k net earnings towards college.
Your parents get hit a bit less than that with a larger asset protection and a sliding scale in % of income. So it depends on what income/age/dependents category they are in to see how it increases their EFC
There are other factors that come into play as well such as simplified formula, so you need to research the rules and formulas yourself, because we can’t determine where your family is in this picture
The financial aid you have for the 2019-2020 academic year won’t be affected. If you start a business now, in 2019, that income will be used for the 2021-2022 FAFSA for that academic year.
Even in the future…Your business earnings will not affect your parents just because they are “on your FAFSA”. BUT your earnings have the potential to affect your need based aid in the future…2021-2022 or later. If you earn $50,000…this most definitely would affect need based aid at most colleges. This could mean that your family contribution could very well increase if your earnings are very high.
BUT then again…you would have those earnings so you could use them towards funding your college costs, right?
Are you hoping you can earn big dollars and still keep the same level of need based aid?
Does your college guarantee to meet full need for all?
First, if you make more money, it does and it should affect your financial aid. Second, the likelihood of making any money from a drop shipment business is very low. The fact that you are taking about the legal structure and the inventory management system demonstrates that you do not understand what it takes to start a successful business.
Okay that’s what I was wanting to know, because I only need a financial aide for 2019-2020. I know that if I get a high income from this business idea that my financial aide will change if I decided to go back to college. Although what do you mean by the same level of need based aid?
If you earn sufficient income, your financial need will go DOWN, and therefore your level of need based aid will go down.
You will not have the “same level of need based aid” if you have high income.
However, if you are graduating from college in 2020, you don’t need to worry about this. Your last financial aid forms for undergrad would be this year…2019-2020, and that used 2017 tax year information.
Grad school financial aid is a whole other thing…not usually need based at all.