I may be opening my own business. It won’t be profitable for at least 12+ months. My investment in it will be just under 100K.
My kids are finishing 10th grade in June. So, based on when we will be looking at getting aid, will this help us or hurt us?
Will,you still,have an income from somewhere?
my wife will… same job - company - for 17 years.
You know…it all depends on your wife’s income…and the colleges.
arw your twins applying to colleges where full need is met for all? Those schools do,use the Profile (except for U of Chicago…and Princeton) and they will ask bout every little thing about your business. Some of,the deductions allowed by the IRS for tax purposes will NOT be allowed for financial aid purposes…and will be added back in as income.
Most colleges don’t meet full need anyway.,
If income is going to be a fluctuating issue…start researching schools where your twins can get merit aid.
And if you are going to have financial restrictions…please let them know BEFORE they start looking at colleges.
Self employment will definitely mess up the predictability of need-based aid. Private colleges that meet full need will likely want to see tax returns and other documents concerning your business, such as P&L statements. Even though your business will not likely be profitable in the first years, you will still have business revenues and college financial aid offices will apply their own standards and judgment concerning what counts as “income” for financial aid purposes.
If you have $100K to invest in a new startup business right now, then it sounds like you also have the option to keep your current job and use that $100K to invest in your kids’ college education. You don’t have to – it’s your choice and your money. Just don’t count on colleges subsidizing that choice.
While it is possible that you may still qualify for need based aid, you will probably see financial aid awards all over the map, and it can be doubly confusing if your twins opt to attend different colleges with different policies.
If it is a priority for you to pay for your kids’ education, then I think you should have plans for that in place before pursuing your own business opportunity. It’s not that you won’t get need-based aid, it’s that there is no way of knowing whether you will or how much you will get during the application process. Additionally, if your business income is likely to fluctuate from year to year, it could make for something of a wild ride after your kids are in college. So you would have to factor that into planning through all 4 years of college.
nope. I have been unemployed for 7 years due to injury. I can work again, finally.
Glad you cannwork again. But calmom is correct. You have $100,000 to invest in a business startup. That won’t be ignored.
Any chance you can apply for, and get a job someplace…that $100,000 will go far in helping to fund the college costs of your twins.
Well, the reason I want my own business is so that I don’t get fired if my injury becomes an issue. I “can” work again, but I am in an awful lot of pain… plus, long term, I think my business will pay off better than working for someone else.
That’s fine for you, but the point is that you can’t count on receiving adequate need-based financial aid for your kids if you are self-employed in a business requiring a $100K investment. The colleges are going to be asking to see things like P&L statement reflecting gross receipts and essentially second-guessing your business expenditures and write offs.
I am self employed and my business requires -0- investment and very little expense. Now I really don’t have a “business” except in the eyes of IRS – I am a freelancer who does contract work for others (think “consulting” in terms of business model) – but the point is that I have experience with how colleges look at self-employment income — and you do have a choices as to whether to save, spend or invest that $100K. With your kids you should hope for the best but prepare for the worst. In other words, the answer to your original question, "Does having an unprofitable business hurt getting FA?
" is that you should act on the assumption that the answer is yes, it does hurt getting FA.
(It may end up working to your benefit – it is all too unpredictable — but that’s the whole point – you aren’t going to be able to predict or plan for the possible impact of revenues from a business you haven’t yet started).
If income is going to be variable…these kids need to look for merit awards…that are NOT income dependent.
If they are in 10th grade now and will graduate and start college in 2019, then your 2017 income is used for financial aid forms for freshman year. Their sophomore, junior and senior year will be based on 2018, 2019, 2020 income.