UVA was my DS dream school and he worked very hard to be accepted. Here’s an explanation from NYT article…
“….The practice—“gapping” or more bluntly “admit-deny” comes as a surprise to students who think that need blind has something to do with providing financial aid. If a college calculates a students need (price minus ability to pay equals need) is $30,000 it might only offer $15,000, leaving families with difficult choices – to make up the rest with private bank loans, go to a less expensive school, or even postpone education.
It makes need blind into a hollow promise…”
https://www.nytimes.com/2014/04/13/education/edlife/what-you-dont-know-about-financial-aid-but-should.html
UVa is one of only two public universities in the US that meets 100% of proven need of US students. However, that aid is provided after offering federal loans and work study. If a family can show unusually high necessary expenses (such as high recurring medical expenses) or recently changed financial circumstances, I believe there is an appeal process.
People who live in locations with a very high of living are most likely to have difficulty affording the expected family contribution. That is because even basic housing in those areas are so expensive, that an upper middle income can still include insufficient funds for college.
Most colleges and universities make little attempt to meet 100% of proven need, except for the students that they really want (such as students with very high scores, recruited athletes, a few under-represented minorities, etc.). Those colleges frequently show huge gaps between aid, family contribution and total costs for most students. Those colleges typically tell parents to take out PLUS loans to make up the difference, which have some unpleasant terms and fees. Other colleges routinely reject many students if they think they will not be able to afford the cost.
There are plenty of other colleges that emphasize merit aid and will provide large tuition discounts to the typical student who is accepted to UVa.
I could not have afforded UVa’s out of state tuition without aid, especially when I had two kids in college at the same time. For my son, UVa’s financial aid offer was equal to several very rich private colleges where he was accepted.
Its painful but i guess i am just venting. What happened is crazy – business losses were counted as income, when we had no income to loss against.
If you have unusual circumstances, it may be worthy of an appeal. I don’t know anything about that process.
Is the school a need-blind school, a meets need school, or both? If they meet need but aren’t also need blind, students who need a lot of aid could be rejected. The colleges calculate need, so even if they meet need I don’t think it’s unusual for there to be a gap between the FAFSA EFC and the net cost.
UVa is both need-blind in admissions and meets proven need, for US students.
My son’s original first choice of a university turned out to have way too high of a net price, so I can understand the frustration. My daughter also had a couple colleges where she was admitted but could not afford. Fortunately, they each had plenty of choices that were affordable.
It is common practice that colleges will review financial information from a Schedule C, K-1, or other sources and add back deductions which are perceived to be paper losses (such as depreciation) or discretionary expenses.
I am sorry that you did not know this, but it appears that there are business deductions that IRS allows but that the UVA would rather not subsidize.
Keep in mind that when people put money back into a business, such as for the purchase of equipment, vehicles, or real estate, they consider it an investment. So they may be able to write off the expenses, but the goal is to make the business more profitable in the future … when IRS will theoretically reap the benefits as well.
But when business owners have children in college, then they are making a choice as to whether to invest dollars into their business or their children’s educations. It could be smart planning for a business owner to reduce their income by investing more $$ to grow their business and at the same time qualify for more need-based aid dollars for their child – but also something that the college might not want to subsidize with its grant dollars.
I understand from your posts that you only have a very small fractional interest in the business, and thus probably no meaningful role in determining how business money is spent … but that still doesn’t change the fact that your son’s college doesn’t want to subsidize those expenses or deductions.
There is such a thing as admit/deny but that really applies to cases where colleges don’t promise to meet need for all students. In your case the problem is that the college doesn’t agree that your “need” is the same as you feel it is --or as shown on your FAFSA.
FAFSA doesn’t consider home equity or assets of a parent-owned business with less than 100 employees – but CSS/IDOC does take information about both.
I understand from your posts that you only have a very small fractional interest in the business, and thus probably no meaningful role in determining how business money is spent … but that still doesn’t change the fact that your son’s college doesn’t want to subsidize those expenses or deductions.
@calmom. Thanks I appreciate the explanation. It makes some sense in a way. No we have no role in those decisions. Selling is a complex thing – not something we could do right away. Sadly, I think there is not much we can do. The timing is not working.
I understand that – I had similar complications.
I am self-employed in a free-lance occupation. For purposes of CC, “consultant” would adequately describe what I do. I work for hire for a small number of clients, who pay me as an independent contractor. Between 10-15% of my income goes to expenses. I file a schedule C. The CSS profile asked questions about the value of my business assets, which are negligible. (I have basic office equipment and supplies, nothing special). But my son’s college insisted on assigning a higher asset value to my business identical to my previous year’s net income. In other words, if my income was $35K they added in an asset value of $35K – which made no sense at all, given that I can’t retire and sell a clone of myself for $35K. Without me, my sole/freelancer worth is -0-. But no amount of persuasion could change the college’s view.
But in the end, the grant aid is the college’s money. Despite that inane declaration that my self was an “asset” valued based on my prior year earnings, that particular college was more generous than others with grant money.
I live in an area where housing prices are insanely high, and my daughter’s college chose to use a method of valuation that worked in our favor. Another 100% need college offered much less in aid. I didn’t follow through because the one with the better aid package was also the preferred school, but I can guess that the difference in awards might stem simply from different practices in valuing and weighing home equity. But again the point is --huge variation in practices.
I think when relying on need-based aid, parents need to make sure at the outset that the student understand the family budget limitations; and that there is no such thing as a “dream” college. Just, hopefully, an affordable college – which may be something rather far down on the student’s preference list. But that is what it is. “Beggars can’t be choosers.”
Again - I’ve been in your position. My son was accepted to his 1st choice college which promised to meet 100% need to some, but not all, admitted students. So we were greeted with an admissions packet that said that they had determined my son to be eligible for grant aid, but were out of funds, so nothing but loans & work-study. They offered to put my son on a waitlist for aid, and encouraged us to double deposit. We said no. (And that is what is meant by the phrase “admit-deny” - that college financial aid office was even able give us a ballpark estimate of what the aid would have been, if the funds had been available – roughly 50% the overall COA at the time).
My DD was inane enough to think NYU was her top choice, and I think you can figure out how that worked out. At least NYU doesn’t pretend to meet full need. So there was kid #2, big fat admission packet and welcome letter in hand… along with token aid.
My financial situation is complicated enough that I didn’t have any illusions that the FAFSA EFC would be met by any school … but the point is, even though it’s frustrating – we were still in the position of depending on the college to give us money. It’s a gift (or a discount), not an entitlement.
Frustrating yes. But the vast majority of college bound seniors probably aren’t fortunate enough to qualify for the level of support we got; my kids had other choices. They still had to borrow and I still had to borrow, but they were given the opportunity to attend good colleges when they had high school classmates with no choice other than to attend the local community college. So in my view, this was a time to count our blessings and move on.
Because different colleges calculate aid differently, it is all the more important to apply to multiple colleges. Of course, there are some colleges that stress need based aid, while others stress merit aid.