The story has changed quite a bit from the original. At first we had a low income family that took out a loan on their (implying primary) home. Now we have a family that is paying themselves by taking loans against investments. This is likely more difficult than what can be solved in an Internet forum. However, I do not disagree with the FA office classifying the loan as income. There must however be more going on than just the 10k to move from the $0 federal EFC to no institutional aid at a meets need school. Since we are dealing with rental properties, it is likely other things that are being classified as income or equity.
Are you the student or the parent?
Checking for clarity.
Are you saying you or your parents had $10,000 additional dollars in “income” from a HELOC, and that netted you $0 in institutional need based aid at a college that meets full need for all accepted students? You had a FAFSA $0 EFC plus $10,000 in HELOC and you got no need based aid?
And again I ask…why are you finding out your financial aid at this late date? Are you a transfer student? Did you get off the waitlist? Did you apply for aid late? You should have received your financial aid package months ago.
What was your parent GROSS income…not AGI, their gross income before all deductions and the like were taken.
What is the equity in your primary residence?
And is this University of Virginia, because if not, you have misunderstood something about the school meeting full need for all.
Too late to edit…
Were you selected for verification and just completed that process?
OP- hugs to you. This is a frustrating situation for you, and I agree with Kelsmom, who is both a financial aid officer AND a financial aid guru, that only your college’s FA professional can answer your questions and figure out if there’s a workaround.
One suggestion though- have ALL your documentation in front of you before the agreed upon phone call time. You will have a far more productive meeting if you’ve got recent valuations on the properties, tax return, summary of any other assets, income statements on the rental businesses, etc. than if you have to answer “i’ll get back to you” or “I know I saw that number a while back”.
I feel awful for you- NPC’s are rarely correct for complicated family financial situations (typically divorce, owning a small business, owning any real estate apart from the family home) so that should have been a red flag for you ages ago. And I think it takes a lot of financial savvy to understand something that’s more complicated than “This is mom’s salary, this is dad’s salary, we have 5K in a money market” so hat’s off to you for wading through this.
You should be prepared though, that as far as the college is concerned, an asset is an asset is an asset. That’s why you being prepared for the meeting is really important. On a balance sheet, a house worth $100K is 100K worth of assets. Selling that house nets you 100K (or whatever, after expenses, etc.). Being underwater on a mortgage, the cash flow on the rentals not being enough to cover the expenses, the HELOC putting your parents ever FURTHER under the gun doesn’t change the fact that your family balance sheet shows assets. So your parents may be having a #$%^ time with their finances and their business and may be tapping into equity they don’t have to keep the lights on and food on the table-- but they still have MORE assets than a family with similar challenges who don’t have anything to their name.
Have as much documentation as you can muster to show that this is your family’s livelihood, that you are requesting professional judgment to re-evaluate your financial status because the HELOC in no way was an asset or income, and that the gap between your Pell, Federal Loan, and your ability to generate income with a part time job will not bridge the gap for you.
Fingers crossed. And if you have to defer to come up with a Plan B, you will be in VERY good company this Fall. So many kids have had their plans fall through- finances shot, parents lost jobs with no prospects in sight, etc. This is a re-set year for a lot of families for sure.
The story has not changed. The HELOC is a loan against the primary residence. This is not the case of a “family that is paying themselves by taking loans against investments.” More like, this is a family that has had to use its only remaining asset, the home they live in, as a lifeline.
Classifying a HELOC against a primary residence as “income” is a new one on me. Maybe that’s something I’ll learn in an accounting class at college.
Thank you Blossom, for the thoughtful, detailed, and helpful response.
@BelknapPoint where do you list a HELOC on a financial aid application form?
@Bigrob could you please clarify for me…are you saying your family has a $0 FAFSA EFC but because of a $10,000 bump in income you got $0 in institutional aid?
- Why is the financial aid issue being addresses the last week of July? Were you selected for verification? Did you file forms late? Are you a transfer student? Did you get accepted off the waitlist?
Most students get their financial aid awards when they get their acceptances. If you are a first year student, you should have gotten that well before May 1. Are you a transfer?
It seems there is something on your Profile that indicates your family has more resources. You need to find out what that is.
And again I say…if this public in VA isn’t University of Virginia, you are misunderstanding that the meet full need for all. UVA is the only public in VA that meets full need for all.
Call them. Ask to speak to someone who can answer your question…this is not usually the person answering the phone. As @blossom noted, have everything in front of you…everything.
There have been some questions about “am I a transfer student” or “did I come off the waiting list”. No, to both. The official offer letter came out July 9th. Only upon receipt of the official offer letter can an appeal be filed. The preliminary financial aid only listed the federal Pell grant so I thought the institutional aid was not yet calculated, that was my mistake. FYI, the gross income was $34K.
I don’t know if this affected anything or not, but my parents told me that the IRS Data retrieval tool did not work.
Why did your aid get sent so late?
How did your parents file their return? If not married filing jointly, then the DRT would not work. Since the DRT didn’t work, were you asked to provide a 2018 tax transcript, or what? Does this college use IDOC?
Any chance your parents amended their 2018 tax return?
None of the standard tools, NPC’s, etc. are going to work in your case because owning real estate other than a primary home throws off the calculations. I’m crossing my fingers that an aid officer can walk through your financials and figure out which elements they can ignore and which things they’ll need to consider. And as Thumper points out- if this isn’t UVA, you will be dealing with a college which is used to gapping students since they do not have enough financial aid to fund everyone what they need. Hugs to you.
On FAFSA, the proceeds from a HELOC would be reported as an asset, if any part of the loan proceeds is still in possession of the reporting party at the time that FAFSA is filed. HELOC proceeds would not be reported as untaxed income. I can’t definitively comment on Profile, because I don’t have access to the current edition, but I strongly suggest that the treatment would be the same as on FAFSA. Of course, a college can use whatever methodology it wants when it comes to awarding institutional need-based aid, but I find it hard to believe that the proceeds from a HELOC would be treated as untaxed income under any circumstance.
If the DRT didn’t work, it’s worth double checking that those numbers were entered correctly. And, since it sounds like your parents filled it out, you’ll want to be sure to have that info for your discussion with FA.
I understand that you think the HELOC is the sole problem, but given the numbers you’ve shared it seems likely that something else is going on. Unless you’re saying you were only expecting a few thousand in institutional aid.
Is the 34k the total income that was listed on the 1040 (Not AGI or taxable income)? What were the income and expenses listed on schedule E (Or schedule c if the rentals are reported there, although this is unlikely as you mentioned they weren’t treated as business income).
Again, the FA office will be your best bet for an explanation. But providing some of theses details might help folks here point to issues that could be relevant.
When were you accepted…and when did you receive your financial aid award. Early Decision offered were made in January. Financial aid should have been right along with the ED acceptance assuming you submitted your documents and applications by the ED deadline for ED students to receive their aid with acceptance. This would likely have been a very early date…maybe October or early November.
Are you saying you accepted an admission offer without sufficient aid provided to you to attend…thinking more would come later?
When did you initially contact this college regarding the financial aid issue? February? June? When!
There is something wrong here. I strongly suggest you get your Profile printed out and go over it line by line. Look for misplaced decimal points you know…making $10,000 look like $100,000. Look for any extra zeros.make sure the numbers are entered accurately (I’m not pointing the finger at you…but mistakes do happen). Check every single entry more than once.
Check to see if the numbers on your FAFSA align with the numbers on your Profile.
Did you submit your documents to IDOC on time? All of them?
Were you selected for verification? If so, what did the college ask for?
Definitely call your financial aid advisor at the school to check that your financial aid is as expected. For us, after contacting the fin aid advisor, it was clear that they didn’t see the negative sign in front of our business loss and considered it a profit. Correcting this innocent mistake doubled our fin aid. I had our tax return, completed fafsa and css in front of me on the call and we went through line by line and that’s how the mistake was discovered. At first the fin aid advisor was certain that the fin aid was correct until I asked to go through it line by line. The initial fin aid was very different from what we expected with our EFC and the NPC calculator estimate. If you don’t get anywhere with your fin aid advisor, then contact fin aid director - I’ve heard this has worked for some. Good luck to you.
Thank you all for your additional comments, this has been very helpful. I am sure going through it with the financial aid office line by line will be helpful, if we can get to that point.
I don’t understand how we got to this point, nor do I understand how the institution determined its own EFC that was so different from FAFSA. If possible meeting with the financial aid advisor and/or director would hopefully work through whatever the issue may be.
I have gotten this question many times and I must not have answered it in a way that makes sense. The FAFSA and CSS Profile were completed on time, but due to the tax filing issue, there was backup information required to be posted that occurred after I received my acceptance letter. The institutional aid was not part of that acceptance letter because the institutional aid was dependent upon the submission of the documentation that was required. After completion of the requested documentation, there was an additional data request that came from the financial aid office in late June/early July; shortly after that data request was fulfilled, the “official” aid letter came out (July 9th). The preliminary aid package did not indicate the institutional aid, as I knew it would not, because there was additional required documentation that was being provided as requested.
There were also questions regarding was the profile selected for verification, and I believe that is was, and the verification and documentation required was submitted through collegeboard IDOC.
Thank you for the suggestion. I did call and after waiting an hour and 20 minutes, I spoke with someone who basically indicated, they couldn’t tell me anything and they would have a financial aid advisor call me in 2 weeks. However, no one has called, and I’ve responded through email and SIS only.
I’m sure the financial aid office is buried right now but I do believe all the back and forth via email and SIS is probably going to make everything take much longer than a call would, going through everything line by line. I just don’t know how to make that happen.
Several people have asked if we are talking about UVA, because they are the only Virginia public school to meet 100% of financial need. I personally don’t know whether that’s true but it’s been repeated here frequently. I have not specified the school as I don’t want it to seem like I am pointing fingers or anything, but I can assure you that the school I’ve been accepted to does state they will meet 100% of financial need. If you know that means it can only be one school, then you know what school it is.
@Bigrob on the financial aid webpage of our school the specific fin aid advisors (and their contact information) were assigned by student last name, so I emailed that person directly and she responded the next day and offered to set up a call. If you haven’t already, be sure to check for that.
We didn’t go line by line of the fafsa, css, and tax return, but line by line of what they take into consideration to determine fin aid, which related to certain lines on the tax return, fafsa, and css. If you are in driving distance to the school, it might be worth the trip to get it taken care of in person if that’s possible. Wishing you good luck.
Can you go there in person to get it explained/straightened out? It’s an in-state school for you, so it must be a reasonable driving distance.