I posted this in the Parents Forum as well, but I thought I would ask on this forum as so many have already been through the process. My nephew is a rising senior, #1 in a top 50 HS with many ECs and varsity sports. He would like to apply to Vanderbilt ED. My sister did the net price calculator and their contribution was about 22k This amount is already a stretch for my sister and her husband. If it ends up being $40k, they couldn’t afford it. Her husband, with a partner, owns rental properties. The properties themselves aren’t worth much according to the tax records, but they do generate rent. She talked to someone in the Vanderbilt FA Department and she said that my sister should rely on the net price calculator, indicating that it should be close +/- 5 percent. She also said the Vanderbilt is very stingy with merit money so they shouldn’t count on my nephew receiving any.
My sister doesn’t have any investments accounts or other liquid assets, other than checking and savings. She also has a 401k and a house with about $75k equity
I know other people have been through this, did your contribution differ significantly from the NPC?
Any input would be greatly appreciated.
The issue your sister might encounter…there are deductions allowed by the IRS for tax purposes for rental properties that are not allowed for financial aid purposes. Those will be added back into your sister’s available funds.
Did the Vandy NPC specifically ask about the rental properties, their value, the rental income generated,etc? If not…that NPC has the potential to NOT be particularly accurate.
<<<<her husband,="" with="" a="" partner,="" owns="" rental="" properties.="" the="" properties="" themselves="" aren’t="" worth="" much="" according="" to="" tax="" records,="" but="" they="" do="" generate="" rent.="" she="" talked="" someone="" in="" vanderbilt="" fa="" department="" and="" said="" that="" my="" sister="" should="" rely="" on="" net="" price="" calculator,="" indicating="" it="" be="" close="" +="" -="" 5="" percent.="">>>
I would not trust this.
Some of their deductions will get added back in…Particularly depreciation, and any expenses that they’re deducting for their personal expenses…phones, car, gas, etc.
Depreciation is likely going to be a biggie for them.
And the value on the tax rolls is not what’s used. That is typically low.
Since you are using the word “properties,” without quantifying, I’m going to guess that there are several. If so, I can’t imagine that their value (not tax rolls) would be negligible unless there are huge mortgages on them.
If they decide to go ahead with ED, I would recommend that they simultaneously apply to a few schools with guaranteed merit with a net affordable cost because those deadlines are usually before the ED results come back.
Too often in December we see posts from students who find out that their ED schools are not affordable and that no school is affordable with purely need based financial aid…because their families cannot pay with the schools expect them to pay. But at that point it’s too late for many schools with assured huge scholarships which would bring costs down to what they can pay…since many of those deadlines are in Nov and Dec
Sometimes it can be hard to get an ED student to apply to some financial safeties with huge merit before they get their ED results back because they are so focused on that ED acceptance. And often they want to wait until afterwards but then it’s too late …merit deadlines have passed, even tho those schools are still acception apps, merit deadlines were much earlier.
Some of the huge ASSURED FOR STATS merit award schools start accepting applications in July, so I would advise them to apply to a couple of them as backups
I wouldn’t rely on the NPC for this. Generally, people with small businesses or rental properties don’t get accurate results, from what others have said. If you can get some idea of the net equity in the rentals, and the net rental income from their Schedule E’s, you could probably get a better estimate here on CC.