NFriday wrote:Hi- People that grow up on farms, in general are unable to get any state or federal grant money for college. Besides factoring in the parent's income, they also factor in the $ value of the farm. This is even the case in a year in which the farm family has no income, or actually loses money. I think that they assume that because your farm is worth lots of money, that you can go to the bank, and get a loan, using your farm as collateral. Just because a farm is worth $2 million dollars, it does not mean that you can sell your farm very quick. I know people that farm, but have grown children that have no desire to take over the farm when their parents die or retire. There is nobody waiting in the wings to buy these farms either. Hope this helps, Nancy
Nancy, this is not accurate.
The instructions for filling out the federal financial aid for are here:
https://studentaid.ed.gov/students/publ ... es5-2.htmlThe relevant section for a family business, including a farm, is:
91. Net worth of business and/or investment farm. Business or farm value includes the current market value of land, buildings, machinery, equipment, inventory, etc. Do not include your parents' primary home. Do not include the net worth of a family owned and controlled small business with not more than 100 full-time or full-time equivalent employees.
Business/Farm Value - Business/Farm Debt = Net Worth of Business/Farm
For business or investment farm value, first figure out how much the business or farm is worth today. An investment farm is a farming business where the parents do not reside on the farm, nor do they materially operate the farm.
Business or investment farm debts are what your parents owe on the business or farm. Include only debts for which the business or farm was used as collateral.
Subtract the amount of debt from the value. Indicate this amount in Question 91 for net worth of business and/or investment farm.
(Boldface is mine.)
Here is a more direct answer from
Purdue's financial aid office:
Q: Is there really a chance a farm family can qualify for student financial aid?
A: Yes, ANY farm family should be able to create eligibility for AT LEAST low interest federal student loans by filing the Free Application for Federal Student Aid (the FAFSA). And some farm families may qualify for additional aid depending on the measure of their financial strength as calculated from FAFSA data. Keep in mind that the value of a family farm in which a family lives is NOT to be reported on the FAFSA.
Q: Are children of farm families treated differently than any other children?
A: No. In fact, farm families who live on the family farm are able to exclude farm-related assets when reporting the family's financial strength on the FAFSA.
Q: How is a "family farm" different than an "investment farm"?
A: A family farm is considered the principal place of residence and the family claimed on Schedule F of the federal income tax return that it "materially participated in the farm's operation." In certain instances, however, even if the family farm is incorporated and the family files a corporate return instead of IRS Schedule F, the value and debt of the farm are not reported on the FAFSA. In such cases, the applicant must show evidence that family members own all shares of stock in the corporation and that those family members also reside on the farm.
If anything, the aid rules are more generous to family farms than to other types of family businesses.