The new fasfa rules are confusing. Need some clarification. I am remarried. My husband makes substantially more then I do and my x, my daughters father makes less then him as well. If it was based on either mine or my x’s income she would receive financial aid. He pays me child support and my current husband has no intention of helping with my daughters college with the exception of allowing me to use the house to take out loans. I have already paid half of my share of the house, he has yet to pay his half as we just married three years ago. It is a $400000 home. His adult son currently has 30000 in loans and doesnt think it should be his responsibility to pay it off. My husband is more concerned with helping him pay that or giving him a downpayment on a house then the $80000 or more it will cost me and my daughter if we have to use his income on fasfa. Of course my daughter wants to be a doctor and is capable of it and has a high chance of getting into an elite school and is dead set on it. I have been putting her child support into 529 plan. With the new rules it appears it wont be based on custody but instead who provides the most support which I would believe would be the x since he pays child support but it doesn’t spell this out. If that cannot be determined it is who has the highest adjusted gross income (us) We share joint custody but I have primary and he lives in another state just south of us and he has her for all breaks and summer. Also my daughter is going to be graduating in 2024. I did just recently read that the department of education plans to take an additional year to implement the changes. Obviously if my daughter and I have to use my husbands income for financial aid purposes it would deplete all of my resources I brought into the marriage (premarital funds used for the home) and would put us in substantial hardship if my marriage did not work out. Why fasfa believes step parents want to fund a step child’s education and includes their income if they did not adopt a child is beyond me. Of course we have only been married for 3 years. It will take him 15 years to pay his share of the home and he is in no big hurry. He would rather spend money taking his adult kids on vacation or buying them vehicles. I’m to the point of telling him that I cannot contribute my income to the household until I have enough saved up for my daughters education. I almost feel like my husbands spending habits are impeding me on saving for my daughters college. Please advise. Thank you
For most elite private schools, the FAFSA rules that you are concerned about are not the only issue. Most of them use the CSS Profile or their own forms in addition to FAFSA, and require both parents’ financial information, so your daughter will have three parent incomes counting against her in financial aid.
The few elite private schools that do not require both divorced parents’ financial information are Chicago and Vanderbilt (usually). Princeton does not require the non-custodial divorced parent’s financial information if the custodial parent has remarried.
If your daughter is planning on going to medical school spending $ on an elite undergrad isn’t the best idea, especially if you aren’t eligible for FA.
As noted, for most of those elite schools, the CSS Profile is required, and everyone’s income and assets are reported there. The custodial parent (and spouse) complete the Profile, and where required, the non-custodial parent (and spouse) complete the non-custodial parent form.
The FAFSA is really only used to determine eligibility for a Pell Grant (sounds like either parent has too high an income for that) and for getting the Direct Loan which anyone can get by completing the FAFSA.
Free advice…if your daughter really has the stats for an elite college (not sure how you firmly know that when she won’t graduate high school until 2024), then I suggest you look where her stats will garner significant automatic merit aid. This is not dependent on family income. Check out University of Arizona, Arizona State, University of New Mexico, University of Alabama…all have auto scholarships based on stats. All have well regarded honors colleges.
Once she has her junior year GPA, and a SAT or ACT score, you can look at other options. Don’t dismiss your own state public flagship.
Most important…what will your annual family budget be for her college costs? That is extremely important for her and you to know. You really don’t want her or you to have undergrad loans if medical school is possibly in the future as that will likely be funded with loans, loans and more loans.
@skieurope would this thread be better placed in the financial aid and scholarship section of this forum?
Part 1 is because of Part 2. A stepparent isn’t necessarily expected to contribute directly to a stepchild’s college education. But, a stepparent is expected to be making equitable contributions to household expenses, which will allow the spouse/biological parent to more easily focus on college expenses for his/her child.
I believe without my husbands income we would get financial aid. My x makes about 60000 with deductions ends up being closer to 25000. I make about 40000 and am self employed as well and take deductions so this would be reduced substantially. My husband makes about 110000 currently but is seeking a raise. Before I met him he did not have much for assets and no retirement as he was recently divorced and they did not manage money well. I had a house paid for and had to sell it and put it on our new house as we moved for his job. I still help with house payments and bills and probably only have 20000 left to pay for my portion of the house. But have told him we need to stop with all the vacations as next year is a college base year. I currently have about 24000 saved up for her college fund but did not anticipate having to save beforehand. So I have been shoveling as much as I can from child support into her fund and have been having my x save with child tax credits on his end. My x is not in a great position to be paying either as he took out a loan because he did not want to sell any property in our divorce. My brother says he doesnt get financial aid and he pays about 20000 a year. I figure that may be the target I should be shooting to save for. But this doesnt give me much time and without my husbands cooperation and unwillingness to not blow through money this could be difficult. I’m still confused who is going to be the one to fill out the fasfa. Is it possible since my x provides child support that he will be able to?
If you were filling out FAFSA today, based on current rules, you’d have to put in your income ($40k as you usually don’t get to exclude many of the deductions, even 401k) plus your husband’s $110k. FAFSA doesn’t care if you spend it on vacations or on house payments. FAFSA actually does consider if you save it (becomes an asset). You’d also have to include the child support.
If in the future you decide your ex provides most of the support (and child support isn’t the only factor as I assume you provide housing and food and medical care and clothing for your daughter and the child support doesn’t cover it all), only his income would be on the FAFSA. Would she qualify for need based aid with a family of 2 (daughter and her dad?)? Maybe, but it may only be a small Pell grant. Schools can give their own aid based on the FAFSA numbers but they don’t have to.
Of course, as others have said above the schools that give the really big bucks usually require the CSS and that form wants EVERYONE’s income and asset information (student, parents, step parents, assets). They might not expect the stepfather to chip in for college, but they will consider that his income is supporting the household and thus freeing up your $40k to pay for college. Don’t worry about the equity in the house or if it is yours or your husband’s. The schools won’t divvy it up that way. To them, it’s a house.
Concentrate on merit.
Yes I keep hearing this and tried to reason with her but her main goal in life is to get accepted into the best college she can. I guess it could be worse and that I am fortunate to have a child that has such high aspirations. These college rankings do not help. She is convinced that she needs to go to an elite school to be able to get into one of the better medical schools. These colleges do not make it easy for the middle class. She took pre ACT her freshman year and scored 28 so she is working on that so she can get a better score for future years. And is working on her college resume so that she can have the best chance for admission. She currently goes to a very competitive metro school and is top of her class and is convinced that she needs to worry about class rank and taking all kinds of AP classes. She does have the opportunity of taking PSEO and could get two years in free but since they are unweighted and would not transfer to some of the elite colleges she is convinced they are not the best route. It might obviously be better for her to take them though if she would go to a state school as they would transfer and get two years out of the way.
If you are self employed and take deductions, there are some colleges which will add in some of those deductions as income. They are allowed for IRS purposes but not for financial aid purposes. This varies by college…but take note…this is a possibility.
There are tons and tons of doctors who don’t attend elite undergrad schools. Your daughter needs to understand that…and she needs to understand the funding of medical schools…usually loans loans and more loans.
I think the biggest issue you face right now is that you need to establish what you are able, and willing, to spend every year. Whether it is what you are able to save and/or your ex’s current child support payments, it is whatever amount you can do. Colleges expect tuition payments to come from past earnings (savings), present earnings (maybe a payment plan), and future earnings (loans). If you determine you can contribute $20,000 or (30 or 50…) per year, you need to communicate that to your daughter. It is easier to have that discussion at the starting gate, where you can eliminate schools that are just too expensive or target merit opportunities, rather than when you are staring at acceptance letters where the options are out of reach. Set the expectations early on!
As others have said, the FAFSA is just to determine Pell grant eligibility. Determining which parent fills it out isn’t really a priority right now as your (or your ex’s) financial picture can change. Private colleges will use the CSS Profile and will calculate what they expect you to pay using whatever formulas and calculations they want.
You have to be the adult in this, meaning you need to tell her what you will pay. You need to tell her that you will not co-sign loans for her. Do this immediately. I was a financial aid director, and I can’t stress enough how important it is to do this. Help her search for schools you can afford. CC is a great resource for that purpose.
She sounds like a great kid and it’s wonderful that she is so ambitious and eager to learn. She’s not wrong about the AP classes and the class rank helping at many colleges. I would encourage her to take as many APs and honors classes as she feels comfortable with.
Not saying this to be a downer, but an ACT score in that range is unlikely to get her in a tippy top school, but she can still get in a very good school. Full disclosure, my D22 got a 28 on her ACT (27 on the Pre-ACT), but she definitely wasn’t as invested in getting her score up (not for lack of trying on my part). I’m sure studying will help! The top 20 schools are reaches for everyone, though, even if they have perfect GPAs and perfect ACTs and SATs. They are highly selective and only accept 5-10% of applicants, and those are all kids who are super high achievers.
I would start talking up other affordable schools like your state flagship as well as keeping her in the loop on the budget. She could start an account at CollegeVine or Niche and plug in her scores and current GPA and see what her chances are at various colleges if that might help. I am a firm believer in public universities and the non-Ivy LACs where you can get merit, myself.
If she’s got her eye on med school it is important not to blow the budget on undergrad.
Also note that both FAFSA and CSS profile add 401k and IRA contributions back in as income even though the IRS does not. And if you sell appreciated assets, capital gains income is added in as well.
You can try using the net price calculators for various schools to see how they would handle your situation. It is important to note that they don’t always work as well for divorced parents and small business owners, but you can enter different numbers to try out the most likely scenarios to see how it works out. Each school has a net price calculator on their web pages.
www.myintuition.org might be a good starting place for a very rough estimate (rough because of divorce and schedule C income)
Do they base the cost of tuition off of all three incomes when it comes to college then? Or just the income from the household with the highest AGI? Besides what I had my x set aside for what he gets back for child credit I doubt he will be able to take out loans. In other words this is all going to fall back on me.
I’m talking merit, not need-based aid. If your kid has good scores and GPA she will get merit scholarships at many LACs that are not super selective like the Ivies, etc. Doesn’t matter about your income so much.
I am just going through this for the first time with my D22 right now, so am not nearly the expert that some of the folks on CC are who have been through it with multiple kids, but we are finding many LACs that will have a sticker price of something like $50K, but then give $25 or $30K to a kid with a 28 ACT score and a 3.8 GPA. We are in the doughnut hole — have too much in income/assets to qualify for need-based aid, but aren’t able to shoot the moon and pay for everything outright either.
You can just run the Net Price Calculators on the college websites with your highest possible numbers and see what you get back. The less selective but still very good private schools will likely give her money.
Thank you so much for all the info. I guess I should figure out schools with good premed programs that provide merit scholarships and hope she will come around to it.
Judging from your posts here, your daughter is entering her sophomore year of high school. It’s good that you are thinking about this now, and can help her get some good options for when the time comes.
But right now, she is at least two years away from actually applying for colleges. What has made her think the elite schools are the only ticket to a successful future, or even medical school.
There are several thousand colleges in this country. And many of them are fine schools where she can get a great college education at an affordable price.
Really, in terms of merit aid, she needs her end of junior year GPA and a real SAT or ACT score. Until she has these, it’s all guesswork.
She also wants to do well on the junior year PSAT as that is the National merit qualifying test score used. If she attains NM status, that would open up some merit aid doors.
In terms of the net price calculators, there are a few issues.
The NPC for your daughter won’t be available until late summer 2023. That’s when the NPC will be updated for students starting college fall 2024. And yes, financial aid policies DO change so anything you might get now would be a very very gross estimate.
The net price calculators are not particularly accurate for students with divorced parents…or for students who have parents who are self employed. You have both issues…so again, you might find these NPCs to be inaccurate.
The most important number is the actual amount you realistically think you can spend to send your daughter to college each year. As others have stated, it is good to let her know up front that any acceptance with a net cost above your price point will need to be off the table.
And lastly, not to be a Debbie downer, but tons of kids think they want to be doctors. Many never even get to the application stage. Of those who do, only 40% are accepted. Your daughter needs a plan B. Everyone considering medical school needs a Plan B. There are lots of other very worthwhile health care professions she might want to at least learn about.
@WayOutWestMom can you post the link to other health care professions, please.
Is there a way I can delete this thread? Just wanted some advise but cant seem to find a way to delete
@skieurope can you please answer this question?
Some colleges consider only the finances of the custodial parent household.
Some colleges consider the finances of both the custodial and non-custodial parent households.
You need to check the web site of each college to find out what it wants to see. When using a college’s net price calculator, include or do not include the non-custodial parent household finances based on whether the college considers it.
With self-employment income, you may also want to run the net price calculators twice, once with net income and once with gross income before any self-employment or business deductions, because some colleges will remove some of those deductions.