Author Topic: FAFSA/Profile - anyone with experience in Financial Aid?  (Read 3340 times)

SnpKraklePhyz

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FAFSA/Profile - anyone with experience in Financial Aid?
« on: July 24, 2014, 07:58:49 AM »
Hi all

My daughter will be a senior in HS this year and we've been looking at colleges.  I assumed I would get very little financial aid because of my salary and assets but in researching this I'm wondering if this is true.  Either way I will fill out all the forms but I'm asking if anyone has experience with this.

Details:  I'm a teacher

AGI = 45,000
403b = 160,000
Trad IRA = 160,000
Roth IRA = 45,000
529 for this child = 26,000
529 for next child = 33,000
Home Value = 350,000

Liabilities
Home loan = 250,000

No other debt.  Two cars, one valued around $5000, other around $2000 (my estimates).  I put these in here because the Profile form requires value of car.  I easily cover all my bills each month.  My savings rate depending on how it is calculated is around 50% (pension, IRA, etc). So no worries there.

Ex-husband (father of children) would be considered on Profile form - I'm guessing from when we were married.
 AGI = 120,000
IRA = 150,000
Home equity = 300,000



My question - I had assumed the 529 counted against aid at 1/4th for each year - it seems now that has changed and 529 doesn't count against aid at all.  Could that be correct?

I had assumed my retirement accounts counted against aid but that seems to be wrong too. 

I found out recently that owning rental homes would count against aid.  I have been considering buying a rental property but now I'm thinking it is best to sink any extra money into retirement or 529.

I'm just looking for stories from recent applicants out there.  And if the rental property thing is true, maybe that information should be spread around this forum.

Thanks in advance for any comments!

Ohio Teacher

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Re: FAFSA/Profile - anyone with experience in Financial Aid?
« Reply #1 on: July 24, 2014, 10:49:58 AM »
I filled out the FAFSA all 4 years and got federal and state grant money, although my dad's income was less than even yours alone.  I don't recall there being any questions regarding assets.  I thought it was only income based.  I could be wrong though, as he didn't have any financial assets to speak of at the time.  My parents were divorced and I lived with my dad, who provided 100% of my care costs.  As such, I didn't need to report my mom's income.  Make sure you actually have to report your ex-husband's.

historienne

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Re: FAFSA/Profile - anyone with experience in Financial Aid?
« Reply #2 on: July 24, 2014, 12:01:57 PM »
No idea about the rental property.

Ohio Teacher, you probably didn't have to report assets because families with AGI below $50,000 do not have to contribute from assets in the federal calculations.  Given the OP's income and her ex-husband's, they will need to make a contribution from their assets.  The percentage contribution varies with income, up to about 5.6% of assets per year.  Primary residence and retirement accounts are excluded from assets in calculating this contribution.

Also, note that the PROFILE and FAFSA are different forms - the latter is used to calculate federal aid, the former is used by some individual colleges to calculate need-based aid.  There is no requirement that colleges follow the federal calculations in making their own need-based grants, so any individual college may treat the 529 plan differently in their calculations.

Relatedly, OP, your ex-husband's income does not go into the federal calculations, but some schools may still take it into account when determining their own financial aid packages.

alwayslearning

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Re: FAFSA/Profile - anyone with experience in Financial Aid?
« Reply #3 on: July 24, 2014, 12:08:55 PM »
Side note: Now that your child is a senior, make sure to check out community college classes that are offered at her high school. In most states they have a program that allows junior and senior high school students the opportunity to take community college classes for FREE while in high school. In Texas, you can take up to 6 hours per semester, giving students the opportunity to start college as a sophomore (saving time and $).

Check with your child's high school college and career counselor for more details.

MillenialMustache

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Re: FAFSA/Profile - anyone with experience in Financial Aid?
« Reply #4 on: July 24, 2014, 12:20:05 PM »
Here is a form where you can estimate your aid, so you could play with the numbers based on the possible scenarios and it might help you answer some of your questions: https://fafsa.ed.gov/FAFSA/app/f4cForm?execution=e1s1.

Also, keep in mind that most of these variables will probably not affect your FASFA very much. The Pell Grant is the main source of money that does not have to be paid back, and it goes to the neediest students. It is difficult to find exact statistics, since it goes to the neediest bunch, not everyone under a certain amount. For instance, in 2009-10, 60% of the students on Pell had a family income of less than $20,000.

The other main aid to qualify for is work study. This is likely also a lower income than you just stated. As an example, my father made about $70,000 with three kids and all I qualified for were federal loans (and you would qualify for that as well). Some colleges use the FASFA to determine their own need packages, and that is where it will be more useful to you. It depends on the school though.

Although I have never worked directly in financial aid, I have worked in higher education for six years now, most of them as a general advisor. Hope this is somewhat helpful.

Gin1984

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Re: FAFSA/Profile - anyone with experience in Financial Aid?
« Reply #5 on: July 24, 2014, 12:20:54 PM »
If the 529 is in your name it is counted as any other asset is counted in your name.  I think it is about 6%.  I can't remember.  Home value and retirement accounts don't count in the FAFSA calc.

goatmom

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Re: FAFSA/Profile - anyone with experience in Financial Aid?
« Reply #6 on: July 24, 2014, 02:48:38 PM »
Yes, ex husband will be counted as he is your ex but still her father.  Fill out the FAFSA, We have a fairly high income and still qualified for financial aid from some colleges.  We didn't get any federal aid.  Your home and retirement accounts are safe.  Good luck!

teen persuasion

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Re: FAFSA/Profile - anyone with experience in Financial Aid?
« Reply #7 on: July 24, 2014, 08:00:54 PM »
Here are the EFC formulas used in the FAFSA: http://ifap.ed.gov/efcformulaguide/attachments/091913EFCFormulaGuide1415.pdf

Start on page 9 and work thru the calculations.  The FAFSA does not consider the value of your primary home, but rentals are included as business assets.  Retirement accounts are not included in assets.  Since your daughter is a senior, the FAFSA you fill out in January will be based on this year's income and tax returns.  I don't think the 15-16 year formulas are out yet, it will probably be September before they are published.  Some tables are adjusted for inflation, but the parent asset protection table seems to shrink each year rather than grow.  It is also more punitive to single parents than married parents.

I'm not sure, but I believe that the FAFSA only counts the income of the custodial parent, and their current spouse if they remarried.  I don't think the ex's income counts unless they have custody, and then your income would not be counted.

All bets are off with the school's "Institutional Formula", that can consider anything they want.

teen persuasion

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Re: FAFSA/Profile - anyone with experience in Financial Aid?
« Reply #8 on: July 25, 2014, 06:07:19 PM »
Another detail that I remembered: the FAFSA wants the value of your assets (checking, savings, non-retirement investments, business value) as of the day you fill out the form, so you can time the filing judiciously.  E.g., before payday and tax refund, after paying all large bills like property taxes, Xmas credit card bills, mortgage payment, heating oil fill up, fund IRAs, etc.