<p>when a college Financial aid brochure states that that student loans have been reduced for families with incomes up to $100,000 ,is that income amount referring to the "Gross adjusted Income amount on a tax return?</p>
<p>,also if income amount goes slightly over the $100,000 amount have you dropped into an abyss and out of the game. Is it true that even at income levels between $100,000 and $200,000 that there is a substantial financial aid consideration at the top ranked/heavily endowed schools?</p>
<p>The colleges that make these claims do tend to be generous. However, it is not quite as simple as your family will fill the financial aid forms and income and assets are part of the formula. It is also complex if one or both parents are self employed or own a business, some business deductions may be added back to income.</p>
<p>If the income is above $100K, yes, you would not get the reduced loan. It will be based on AGI. They have to draw the line somewhere. </p>
<p>As for aid when your AGI is between $100-200K, a few very high endowment colleges do offer it. As noted above, assets are eloped at too. If you have average assets for the income you will usually be awarded some aid. If you have more significant assets (a large investment portfolio,de second home, inherited money…) you may not qualify.</p>
<p>Also keep in mind That work study ( when no loan), wille be the firsts form of aid offered.</p>
<p>They have to draw a line somewhere. It’s the same at the lower end of the income spectrum. I’ve had church members turned down for fuel and medical assistance programs because they had as little as $100 over the asset limit.</p>
<p>Is it true that even at income levels between $100,000 and $200,000 that there is a substantial financial aid consideration at the top ranked/heavily endowed schools?</p>
<p>At a FEW, not all. </p>
<p>Harvard, Yale, Princeton, Stanford and (I think) Williams are the schools that give what I call “super aid” to those who have earnings up to about $160k. The other top ranked schools seem to use the more traditional calculations which seem to expect about 33% of those high incomes. So, someone earning $150k might be expected to pay about $50k or more per year (depending on assets).</p>
<p>The fact that those few give super aid sometimes misleads people into thinking that all the ivies/elites do this.</p>
<p>NYU gives lousy aid. And some of the other top schools, like JHU, are sometimes known for expecting parents to pay a lot.</p>
<p>Comments greatly appreciated.
Presently we fit in the under $100,000 income with modest assets to match. Our daughter, who will graduate in 2013, and will start the application process next fall has the academic record,impressive test scores and rounded extra-curricular resume to be competitive for top schools and could have a free ride at our top state institution. The looming question- If her 92 yr. old grandmother dies and leaves assets of $60k x 4 ($260),is it wise placing this toward an Ivy League or Top ranked education experience or retaining it as security and other possibilities in enhancing her life. We now use this as encouragement to my mom to continue to live a very long and productive life.</p>
<p>The looming question- If her 92 yr. old grandmother dies and leaves assets of $60k x 4 ($260),is it wise placing this toward an Ivy League or Top ranked education experience or retaining it as security and other possibilities in enhancing her life.</p>
<p>I wouldn’t spend my entire inheritance towards an ivy. My last parent died in 2011, so I am receiving a chunk of money within a very short time. But, I’m not spending it on a pricey school for my kids. Not worth it. It’s going towards more rentals for our retirement…and to leave my kids an inheritance.</p>
<p>My kids accepted large merit scholarships for undergrad. One is now at a top 20 school for his PhD (full assistantship). The other is applying to med schools this summer. We’ll pay for that out of the money saved from not paying much for undergrad. </p>
<p>What is your child’s intended major or career?</p>
<p>Since your D has the stats for large merit scholarships, she should at least apply for some of those to have those as options/backups. </p>
<p>The ivies are a crapshoot for everyone…even those with tippy top stats. Too many kids these days have tippy top stats…perfect/near perfect SATs, perfect GPAs, etc, etc.</p>
<p>Who is the money being left to? If it’s the parent, after your asset protection it will probably only be assessed at 5.6%/yr. Im not sure what protection levels and rate top schools are using these days, but I’d be surprised if they’re not as generous as FAFSA here. With few other assets you are unlikely to have to pay much of that. All bets are off for less generous schools though.</p>
<p>addressing two comments here.
What is your child’s intended major or career?</p>
<p>Since your D has the stats for large merit scholarships, she should at least apply for some of those to have those as options/backups. </p>
<p>The words my D. has recently been heard to say in answer to what do you want to study…have been business, economics and international. She use to say Psychology and I know she is interested in Greek Mythology but her pragmatic nature is shaping her direction. Her father is a chemistry professor and I am an artist . These may be clearly out of the running. This question spurred me to google the rankings of the top undergraduate business programs where I see The U. of VA is no. 2. The out of state price tag at this public school is $50,000. What may be schools that may award substantial merit scholarships that are ranked leagues beyond The University of Alabama ( our $0 cost baseline)</p>
<p>Who is the money being left to? If it’s the parent, after your asset protection it will probably only be assessed at 5.6%/yr. Im not sure what protection levels and rate top schools are using these days, but I’d be surprised if they’re not as generous as FAFSA here. With few other assets you are unlikely to have to pay much of that. All bets are off for less generous schools though.</p>
<p>About the inheritance money. Its complicated but the bulk of it would be left to me( The parent)25% would go to an older half sister from a former marriage. but the total amount would be substantially beyond $260,000.</p>
<p>
Short answer is, generally not, if by “gross adjusted income” you mean line 37 on your 1040.</p>
<p>Long answer is, a closer number will be your total income (line 22 on the 1040) with some pretax deductions added back in. The big one for most people is 401k contributions.</p>
<p>If your tax situation is complicated (for example if you own rental property or have your own business) it gets even harder to predict, because CSS schools will make their own adjustments based on their own formulas, for example disallowing certain deductions off of your schedule C.</p>
<p>There’s sometimes (maybe all the time) a disclaimer on claims that certain aid will be given up to certain income, which is that it is based on having a “normal” or “average” amount of assets. A quarter million sitting in the bank from an inheritance (or anything else) is probably not considered average,</p>
<p>I found this breakdown of FA awards for one school (meets need/ no loan ) very interesting. As you can see the income does not always correlate with the aid package. BTW this school is great for Economics (and IR and Finance)
[Package</a> Aid, Financial Aid, Claremont McKenna College](<a href=“http://www.cmc.edu/finanaid/package_aid.php]Package”>http://www.cmc.edu/finanaid/package_aid.php)</p>
<p>I thought I had read in other threads what notrichenough said . . . that it is NOT AGI and that any 401k contributions made in the base year were added back in . . . this would make a big difference for us. What about other reductions to income . . . health plan premiums, flexible spending, and spousal support (not child support)? If anyone has a resource that explains this more clearly, Id love to see it. I know each school is different, which complicates it . . . are they all different when it comes to AGI vs. earned income as the magical cut-off? </p>
<p>To further complicate things, I will also have the NCP situation . . . I fully expect the schools to include exs income, AND I fully expect that he wont cooperate and complete the CSS profile. I KNOW he wont be contributing, but I also know thats not a factor in aid decisions. My S would probably actually benefit from those schools that say they try to look at bio parents income first (ie, MIT and apparently Harvard according to their calculator), if he were lucky enough to be admitted. </p>
<p>Ive been trying to sort all this stuff out, but its making my head spin. The Alabama scholarship is looking better every day!</p>
<p>AGI is the driving number for most families (understanding that those who can fund 401K’s at that level are in the top few percent). However, all untaxed income is also considered in the formula … and those 401K contributions are untaxed income. Untaxed income also includes child support and alimony if the recipient did not claim it as taxable income (which he/she probably had to do, anyway). Basically, any money that is available to the family to spend is considered. The formula doesn’t care about discretionary spending, so that is not considered. Spousal support is also not considered, although it is possible that some more generous schools might take it into consideration if the family asked for a review (the average school would not).</p>
<p>ok…I am really confused now after reading this. Here is my situation. Divorced, twins attending college fall of 2012. I get both spousal and child support, but child support will end when they graduate in June. Will they take both types of support into consideration for aid? Also, my ex will not pay a penny for college, it is going to be a struggle to get him to fill out FASA. Does he have to, if I am primary parent? Do they count his income? They are screwed if they do.</p>
<p>^^If your kids apply to colleges and universities that only require the FAFSA your ex-husband’s information is not reported at all. About 300 (generally private, generally expensive) colleges and universities use supplemental financial aid forms or the College Board Profile. Many of these 300+ colleges require the non-custodial parent info be provided…</p>
<p>Kelsmom,</p>
<p>“However, all untaxed income is also considered in the formula … and those 401K contributions are untaxed income.”</p>
<p>I am also new to the FAFSA (and college admissions). I am trying to get a grasp on whether or not we will be able to fund our S’s college education (and that of his 2 younger brothers) I was under the impression that retirement savings is not factored into the equation. Am I mistaken?</p>
<p>“Basically, any money that is available to the family to spend is considered.” </p>
<p>401K isn’t really money we can spend, right? Please forgive my ignorance related to the financial aid process, but I am puzzled?</p>
<p>It seems like its not AGI at all if you have to add back in all pre-tax deductions that are not included in wages, tips, etc. Perhaps most families dont make substantial 401K contributions, medical flexible spending, or have high pretax health premiums, but I would think that those that are teetering at the magical $100K limit would probably have at least a few thousand that could send them other the top when added back in. Maybe Im just deluded!</p>
<p>I was just using those items on this NCP list . . . I missed the last bullet (probably just didnt WANT to see it!):</p>
<p>How much did your parents contribute to non-taxable retirement plans and/or receive in untaxed income and benefits, such as child support for the most recent tax year? See Help (?) for a complete list of items to include.
The answer to this question is the total of the following items made or received during the most recent tax year:
Deductible IRA and/or Keogh payments made (IRS Form 1040, lines 28 and 32 or 1040A, line 17)
Payments made to tax-deferred pension plans
Child support received for all children (not amounts paid)
Untaxed portions of IRA distributions or pensions, excluding “rollovers” received (IRS Form 1040, lines 15a minus 15b and lines 16a minus 16b or 1040A, lines 11a minus 11b and lines 12a minus 12b)
Tax-exempt interest income received (IRS Form 1040, line 8b or 1040A, line 8b)
Housing, food, and other living allowances received, excluding on-base housing or basic military housing allowances
All other untaxed income not reported elsewhere in this calculator.</p>
<p>Sorry OP if this part is off-topic for you . . . Im still confused about the alimony/spousal support PAID. It would be included here in the following section . . . do they not subtract these adjustments?</p>
<p>How much were your parents’ total adjustments to income?
These adjustments are reported on your parents’ tax return and may include moving expenses, student loan interest deductions, and tuition and fee deductions. They are found on IRS Form 1040, line 36 or IRS Form 1040A, line 20. If your parents did not file a 1040 or 1040A or there were no adjustments to income, enter “0” (zero). </p>
<p>Although adjustments to income are subtracted from your parents’ income on their tax return, they should be reported here as a positive number.</p>
<p>^ Money that is already in the 401k from previous years is not counted as an asset that can be used to pay for college.</p>
<p>However, the current year’s contribution is added back in, the theory being that you could have chosen not to put it into your 401k, making it available to pay for college.</p>
<p>^^ Thanks Notrichenough (great name btw!)^^</p>
<p>I guess, according to colleges, we’re supposed to refrain from contributing to retirement for the next 12 years!?!</p>