<p>This student is actually in a pretty good position. If athletics are involved there is that avenue to pursue coupled with apparently grades and test scores that would put the student in the running at HYP caliber college. My S had a friend who went through this back in the '07 cycle. This kid, too, did not receive the “best” offer from H and ended up at a great school and will graduate this spring. Fortunately or unfortunately families that have a business can run many expenses from cars, to office space in the home, to gas, to memberships, to memdical, to retirement accounts, etc. and unfortunately many colleges add back to income some of these expenses that salaried people pay out of income. We have friends who both run their own businesses, live very modestly run expenses through their companies and will never, ever see a dime of financial aid for their kids.</p>
<p>I am curious about this, although S is a junior.</p>
<p>I have a small business. Will the colleges honor any of my business deductions at all (say cost of inventory or mileage or supplies)?</p>
<p>Do I have to wait until I apply to determine what business deductions the colleges will allow? I can’t believe the colleges would think every business deduction in every business is dishonest.</p>
<p>commaspice, it’s not that the deductions are “dishonest” but as noted above, some of them are things that others pay for out of income. Many business owners write off cars, parts of their homes (for office purposes), clothing, utilities, even health insurance. For many others, these are expenses that they pay out of their incomes. </p>
<p>Schools treat business owners and their losses/expenses differently. Different schools have different ways of dealing with this.</p>
<p>While colleges do not expect you to dip into retirement savings to pay for college, they <em>do</em> expect you to stop contributing to your SEP/IRA/401(k) while you are paying for college. Not a smart personal financial decision, IMO, but if those contributions were excluded from income, we’d see a lot of people throwing $16K+ into their 401(k)s all four years of college so they could qualify for more FA.</p>
<p>Did you make it clear in your PROFILE that your house is upside down? Do you own the building where your H’s business is located? Are there other assets (inheritance, trust, even if not yet payable)? I’d get on the horn and get someone to go over the calculations with you. </p>
<p>I have seen lots of folks with their own businesses complain that they aren’t treated well in the FA process. </p>
<p>We expected to pay 30% of income for one kid, 40% with two. My older S’s school is very explicit that whatever assets are in the student’s name will be fully drained by the end of four years. If one can’t find a job/studies abroad over the summer, the summer earnings expectation is still there.</p>
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<p>How would this be different from any other kind of debt/loss such as credit card debt, college loans, stock market losses, etc., which are not used in FA calculations?</p>
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<p>sadly --self employed people pay ALL of the FICA, ALL of the taxes, ALL of the health insurance and co pays and expenses (we had over $33k in health expenses above insurance premiums this year alone),
ALL expenses many people’s employers cover in part or whole…we pay…
and the institutional method evidently ADDS BACK in part these allowable deductions…
as “available income” even though they are not available --the Fed will not understand if we dont pay FICA or income taxes…</p>
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<p>It is a service business. Assets include a couple of book cases etc, and used computers, with maybe a second hand value of less than 7k. In a service business the value is the person, there are not “widgets” or stock to hold. A business of 1.</p>
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<p>We have no retirement plans, and the SEP is the only vehicle/option for us. The IRA value is less than one years COA. </p>
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This statement is wrong on so many levels–I suggest you start your own business, get a tax accountant and find out how good people have it when they are NOT self employed and someone else picks up the tab.
There is so much disinformation about self employed workers and tax “advantages”</p>
<p>sigh</p>
<p>I am sure the employees at these universities have health insurance and retirement plans…perhaps we can go live with them.</p>
<p>I think the “hype” of the 10% contribution has caused many to have expectations beyond what the schools intended – especially if they don’t state if the 10% is from “available cash” or gross income. They certainly consider current income as a significant factor, and near term and long term earning ability to be a soft factor.</p>
<p>Is the 10% “advertised” based on adjusted income or gross income? Is the 30% of income you’re talking about based on adjusted income or gross income?</p>
<p>Not clear from Harvard’s financial aid website if their advertised 10% is gross or net. Didn’t look at Y or P.</p>
<p>In the recent past, it was expected by most fin aid calculators that assets in kids own name would be 80 -100% depleted by end of undergrad. This expectation is transparent by most schools.</p>
<p>Every reason for the school to expect that student would have a summer job and contribute. My kids have had 30 hour per week country club jobs for 10 weeks @ $8.00/hour = $2400. A little taken out for standard deductions…easily over $1500 in summer earnings. Increases each year for return employees have made these low stress jobs fairly lucrative!</p>
<p>As for campus work-study, many of the ivies and top schools have some great opportunities to work for professors or in departmental offices. Some jobs “push paper” - but many are jobs with content and good resume builders. Especially the ones available after Freshman year. Could be a little tough, though, to get get to $3,000 for a kid in a demanding year round sport… </p>
<p>There have been a bunch of reports on this site and others about how self-employed really need to look closely at how income and deductions are reported…so that they are aware of how these items will be treated by thee institutional methods.</p>
<p>If medical expenses were one time and not on-going, they are not likely to be fully deducted in the calculation. Although, I have heard of examples of Fin Aid being adjusted when the expenses have happened in the year of attendance.</p>
<p>30% of gross income would be a lot, that could be 50% or more of your take home pay. At this point I’d say that if I could make $200K a year I’d be happy to pay COA, but I might think otherwise if I were in that position. In any case, sending a kid to college is scary.</p>
<p>^^ all good thoughts</p>
<p>I am calling our tax accountant tomorrow to discuss things.</p>
<p>I am hoping the fin aid office will be honest with me about some things–though I think they want to hide how they do things and how they compute things…
I wonder too if they do it the same for everyone?
Is there any Sunshine law for these things that these institutions have to show they use the same rules…</p>
<p>The woman said something about the use of “professional judgement”
and couldn’t tell me how they figured our EFC…</p>
<p>Is there any regulation of these things or is this all serendipity and they can do what they want…? I know its their funding, yet if there is “professional judgement” that tends to suggest it is not cut and dry…
The young woman I spoke with is definitely NOT a cpa nor does she know tax law and corporate structure…</p>
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<p>As you noted, it’s their funding and they can award it as they choose. They can also package the awards any way they choose to. For schools that give loans in their packages, you might get more or less of a grant/loan than the next person. It is the school’s decision.</p>
<p>I know that sounds unfair, but these schools choose how to disburse their institutional funds. They also can choose how to use the financial information on the Profile, and whether (or not) to use any of the supplemental Profile questions for their students.</p>
<p>I have often said that the “family contribution” the school computes is NOT as important as the number the family feels they CAN and WILL contribute to the college costs. Often, the college’s computed family contribution does not align with what families can contribute or hoped to be asked to contribute. This is especially true for high middle income earners who might not be eligible for significant need based aid but face staggering college costs. The price of these private schools IS staggering when paying out of pocket.</p>
<p>I think you need to discuss your situation with someone higher up than the person who answers the phone. You need to ask them to go over the numbers with you so that you are sure they are entered accurately. You need to explain any extenuating circumstances (VERY high medical expenses can be considered a special circumstance and sometimes family contribution is adjusted to reflect those). </p>
<p>But you also need to consider any and all other options that will help your guy get his bachelors degree. I know you are disappointed about the financial aid prospects at this Ivy, but try to find some other options that will work for your guy in the academic, sports, and financial areas. There ARE options for him…he sounds like a student with much to offer some school out there.</p>
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<p>My kid is Pell eligible and also at a school with a reputation for being very generous with aid (which they are!), but he also has to work every summer and contribute money towards his costs. It was $1600 the first summer and has been $2000 for the last couple. This seems only fair. </p>
<p>He is also expected to work on campus during the term and he is also a varsity athlete. He has found that he doesn’t spend as much as the school predicts a student needs for “personal expenses” so he doesn’t work the maximum number of hours at his on-campus job, but he works enough that he can get what he needs in terms of day-to-day necessities.</p>
<p>Can’t speak to the business stuff, but the student contribution piece seems typical, and reasonable.</p>
<p>I am sure the employees at these universities have health insurance and retirement plans…perhaps we can go live with them. </p>
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<p>Let’s see … I am one of those employees. I work evenings & weekends for free, presenting financial aid information to our students and to the public. I make less than $38,000/year. I drive 80 miles round trip, and I drive to my outreach events in my own car without compensation for mileage. I pay $65/month to park. After 2 years, the school pays 10% to a 403b … not a large amount of money, and it is market-sensitive … no pension after retirement. Our health insurance requires a high monthly premium (although I will admit that I wouldn’t have to pay $33,000 in costs). My counterparts at private schools make about $10,000/year less. In other words, it’s not like we are living large - our grass isn’t really greener. The thing is, we also are not making the rules … the policies are made by the very top administrators, and I assume they have put a lot of thought into their policies.</p>
<p>I understand your frustration with not getting the answers you would like to have. You should ask to speak with someone who can explain things to you … you just have to insist on speaking with someone who CAN explain it (you probably got the first-line call screener). One of two things will come of this conversation: Either you will find that they misinterpreted your situation & they will change your awards or you will find out that they won’t budge & so you will then move forward to other options that will work for your family.</p>
<p>Remember, there are lots of schools. This one isn’t the only one.</p>
<p>Is the 10% “advertised” based on adjusted income or gross income? Is the 30% of income you’re talking about based on adjusted income or gross income?</p>
<p>Good point. I think we’ve been thinking it’s AGI, but it may be gross income for these super generous schools.</p>
<p>*Then from that “available income” they calculated, they are asking for 30%!!!</p>
<p>AND even though that AGI as they calculate it-- was under the 200k cap…and they want 30%!!! from the parents…*</p>
<p>So, if they calculated your AGI to be - say - $150k, then 30% of that would be $45k…so, about $10k of need.</p>
<p>Is this what they are expecting from parents? </p>
<p>Hmmm… I wonder…do you think this is some back-door way to force a student loan from a “no loan” school? Certainly, if the CSS “efc” is too high, families will resort to student loans.</p>
<p>I always assumed the income the generous full need met with no loan schools were referring to was gross income rather than AGI. Which for a business owner could be a problem, I imagine…</p>
<p>Is there any Sunshine law for these things that these institutions have to show they use the same rules…</p>
<p>Ivies (and other privates) are not public institutions. Sunshine laws are for gov’t entities.</p>
<p>They don’t have to follow the “same rules” because no one has the power to decide what those “same rules” are. Actually, public colleges don’t really have the “same rules” either because they are governed by states, not the fed. </p>
<p>However, they follow the same rules for Pell and other federal aid.</p>
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<p>fogfog, I think this is asked of every student to work the summer before college if we don’t have savings on hand. Also, that $3000 work study you mentioned before is for miscellaneous costs like travel fees, money for clothing, going out to movies, etc. It’s not something that your son/daughter will have to pay the school directly.</p>
<p>And also, paying about 30% of your income for your son/daughter to eat, sleep, go to college, and everything for a year doesn’t sound that ridiculus to me…</p>
<p>there any regulation of these things or is this all serendipity and they can do what they want…? I know its their funding, yet if there is “professional judgement” that tends to suggest it is not cut and dry…</p>
<p>Is this ED?
As the old hands know- don’t apply ED if it depends on your package.
Even in schools that meet 100% of EFC, the aid package can be configured however they want with work study, loans and grants.
It also can very quite a bit- while my D received a generous aid package from her school with only small subsidized loans, manageable work study and the rest in grants, other students who may have had better numbers, had packages that were mostly loans.</p>
<p>Schools also can use PROFILE information in a way that meets their needs as well as have their own forms for families.</p>
<p>Just as acceptances aren’t strictly by numbers, the aid offers even when need based aren’t cut and dried.
Which is why comparing packages is a must for most families.</p>
<p>However, 1/4/to 1/3 of gross income is standard- and believe me, when your income is $50,000, it’s difficult to come up with $16,000, however, since that is still less than instate tuition + rm & board…</p>
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What other things are not seen as deductions? - particularly from an apartment rental business?</p>
<p>It’s not ED, emeraldkity. The OP said it’s one of HYP – so no ED is possible. It’s an early read on FA. It’s something schools will sometimes do for a recruited athlete or other student who is having to make some early choices between other options.</p>
<p>The OP’s child may have chosen this school because they thought it would be fab aid for a recruited athlete at a “no athletic scholarship school”.</p>
<p>If that’s the case, and the school is essentially expecting you to pay full freight, I’d look elsewhere.</p>
<p>Maybe it’s just me, but unless I was wealthy, I would not pay full freight at a school where my child was a recruited athlete. My sis is paying full freight at Tufts and her son is a recruited athlete. I think that’s a bit nutty. I’d expect some kind of substantial “need based aid” figured out somehow…even if “professional judgment” had to do handsprings and say that my family contribution is now somehow $25k.</p>