@nomorecoll96 I see, makes sense with the assets. On the parent contribution, I really do think there was some sort of miscommunication there, although I don’t know for sure. I’d probably call that Ivy back and clarify. If it’s the same school where you’re going to request a review, you could ask the FA officer dealing with that.
If the school is insisting that there be a parent contribution even if 100% of the COA is covered by outside scholarships (no school money involved), then either the school or you is misunderstanding.
No. FAFSA is both income and asset based, just like Profile and any other need-based determination.
@BelknapPoint, I believe you are partially correct about FAFSA. This is what I found, but it could be wrong. If so, let me know.
Certain types of assets are not reported on the Free Application for Federal Student Aid (FAFSA). For example, the net worth of the family’s principal place of residence is ignored on the FAFSA, as are any small businesses owned and controlled by the family. Likewise, pensions, 401(k) plans, IRAs and other qualified retirement plans are ignored. The car also isn’t reported as an asset on the FAFSA.
Other investments are reported on the FAFSA, including bank accounts,
brokerage accounts and investment real estate other than the primary
home.
Where are your assets that they “don’t count” on the FAFSA?
If any of the outside scholarships are merit based awards that are for all four years, I would suggest taking those.
You wrote that “FAFSA is not asset-based, whereas most school’s finaid or CSS forms are.” This statement is not correct. Assets do (in most circumstances) play a part in determining a FAFSA EFC, just as they do with Profile or any other need-based aid determination. And all of these processes ignore some assets; I never claimed anything differently. FAFSA and Profile both ignore qualified retirement accounts; FAFSA and some schools that use Profile ignore equity in a primary home; FAFSA and many schools that use Profile ignore vehicles outside of a collection. But unless an applicant meets the FAFSA simplified needs test, reportable assets must be disclosed and will very likely affect the FAFSA EFC. Therefore, FAFSA, like any need-based financial aid process, is both income and asset driven.
The only times assets are ignored entirely on the FAFSA are…
- If the student qualifies for an auto $0 EFC.
Or
- If the student qualifies for the simplified needs test.
Neither of those things apply to the Profile.
@nomorecoll96 did you qualify for either of these?
@thumper1, I do not know if the student falls into one of those areas. Is there a link to under those?
Eligibility for Pell is determined by your Fafsa. Everything on your Fafsa is considered in determining whether you can get a Pell. The fact that Fafsa asks about some assets but not others is irrelevant. The questions that it DOES ask are the questions the federal government has decided it wants to look at. That’s all.
There’s a miscommunication somewhere. You are not forced to pay out of pocket if the student has outside scholarship funds that exceed the amount of the institutional grant and family contribution amount. And there’s nothing that says you have to accept the institutional grant. Just tell them you decline the institutional aid. But make sure the student can still be eligible for institutional grants next year if you decline this year (shouldn’t be a problem, but check anyway).
What was your FAFSA EFC?
To qualify for simplified needs, you need an income of less than $49,999. Plus an additional qualifier like qualifying for SNAP, subsidized housing or the like.
For auto $0, your income would need to be less than $29,999 with the same qualifiers.
When you did your FAFSA, did you have to enter your asset (bank account information, etc)? The FAFSA has Skip logic which would just skip these questions if you are not required to do them.
If these questions didn’t require an answer on your FAFSA, perhaps that is why you don’t think assets count.
It is very possible to qualify for the Pell or some portion of it as this is based on your FAFSA EFC only.
But…there is no auto $0 EFC or simplified needs test for the Profile. Those schools use all of your financial data…all of it. And they have very robust need based aid calculation formulas which take all of this information into account.
Profile schools will use your assets in their calculations…not just your income. So…it is very possible to get a Pell Grant and still have a large calculated family contribution at a Profile school…because your assets make it so.
ETA…some Profile schools deal with self employed or business owners differently as well. There are a lot of deductions allowed by the IRS that are added back in as income for financial aid purposes. So if you are self employed or own a business, this could add to your family contribution at some Profile schools.
If a full-pay kid won scholarships, the school would let that kid use them, even though that dips into the family contribution, right? So - can’t imagine why the school wouldn’t let someone with schollys that cover the institutional aid plus more use those. Interesting.
I will say, @BelknapPoint is very savvy and sort of an expert here on these boards . … I appreciate his/her point of view quite often.
Outside scholarships reduce family need…because they are paid by someone other than the college.
The very vast majority of colleges expect that families will pay the family contribution.
It seems like the question that @bgbg4us is asking about in #29 is about outside scholarships that exceed the student contribution + college grants (if there there were no outside scholarship). For example, suppose the college has a list price of $70k, and the student gets FA with a $36.5k college FA grant, for a net price of $33.5k with $30k of parent contribution and $3.5k student contribution. So (based on stated policies of Harvard and Princeton to replace student contribution first when outside scholarships are used)…
- Outside scholarship <= $3.5k: Reduces student contribution and net price; college FA grants (= $36.5k) not reduced.
- $3.5k < outside scholarship <= $40k: Student contribution reduced to $0, college FA grants reduced, net price = $30k (= parent contribution).
- Outside scholarship > $40k: Some claim that the college will refuse to allow the student to use more than $40k of the outside scholarship, imposing a minimum net price of $30k. But is that actually true, or would the college just let the student bring in the outside scholarship, reducing the net price to below $30k, with no college FA grants given?
Verify, verify, verify. I sat on the awards committee of a foundation which provided college scholarships to needy kids. We were clear that we were a “last dollar” donor-- the money was to be used to fill the gap between Pell, any state awards, the college’s own financial aid, work study, etc. and the cost of attendance. Since most colleges do not (and cannot) fund full need, most applicants had a substantial gap (well above their EFC) between what it took to get to college in August and their resources- including all sources of aid.
We would NOT have funded a kid who got an award from a school as generous as Princeton in order to replace institutional funds that the parent considered inadequate, or to make sure the kid did not need to fund his/her own “self help” component.
So OP- before you tell Princeton you don’t want their money, get it IN WRITING that the outside organization is willing to fund your kid in lieu of need based aid, for four years. If they will- great. But get it in writing. My organization would not have done so.
thank you for everyone’s comment. I will have my d go back to the school to verify some of these points discussed. I appreciate all your input.
FYI here was info about deferring a scholarship to pay loans:
Or here is Longtime Dell Scholars Program leader Oscar Sweeten-Lopez told the Baltimore Sun “‘[t]he majority of the students that we work with will face some kind of a displacement.’” To ensure that those students—around 3,800 in the program’s 14-year history—get the most out of their awards, the Dell Foundation allows students who face displacement to defer their scholarship money until they graduate. At that point, they can claim the full value of the scholarship and use it to pay off loans.
Wouldn’t the student have to pay taxes on the scholarships received in years where they aren’t paying QEE? If the student receives $20k in scholarships (say $5k/yr but paid in a lump sum) to repay $20k in loans, the student would have $20k in taxable unearned income that year. If the student worked from July 1- Dec 31 and say they earned $25k for that period, they’d have $45k in income for that year.
I have a student at Princeton who received some outside scholarships, and the university reduced the amount of money my kid was expected to earn from work study and summer employment.
@andisoul, thank you. Most of the scholarship foundation I have talked to said it must be paid to the school, and for the following year. I am just wondering if you take out a loan to avoid displacement, how will the claim the full value of the scholarship since they must be paid to school?
@TigerinWinter, the outside scholarships covers up to student contrib and $3k for computer. I am not sure how you can order a computer and have the school pay for it, but I will ask the school. Just thinking aloud.
I think this is the key point…as a former financial aid kid and now a full-pay parent, I know that any outside scholarships my full-pay D receives would reduce the amount we were required to pay (assuming these scholarships didn’t have a need-based component which would have mean she wouldn’t have qualified).
If you did have financial need (and as was the case for me as a financial aid kid at a school that met full need), while every school handles it slightly differently, if a student earned enough outside scholarships to exceed the work study, loans, institutional grants, student contribution, etc, then those scholarships could be used to reduce the EFC for the parents.
If your student has scholarships and aid in excess of what the school bills the students, usually the student gets that back in the form of a refund once the term starts. So…your college wouldn’t pay for a new computer…the student would…using the money they were refunded.